Evergrande Chairman Accused of ‘Illegal Crimes,’ Admits Company

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In a filing to Hong Kong’s stock exchange, Evergrande, a Chinese developer, announced that its chairman, Hui Ka Yan, has been placed under mandatory measures by the relevant authorities due to suspicions of illegal crimes. Trading of Evergrande’s shares has been suspended until further notice. This confirmation comes after reports emerged that Hui was under residential surveillance, which restricts his movement and communication without permission.

Evergrande’s shares had only recently resumed trading after a month-long halt and have since plummeted by over 80%. The company has been at the center of China’s real estate crisis, which has also impacted other major developers such as Country Garden. Increasing debt and liquidity issues, prompted by new regulations from Beijing, have led to defaults and financial losses for Evergrande. The company reported a combined loss of $81 billion in 2021 and 2022 and was unable to issue new debt due to regulatory investigations.

The list of setbacks for Evergrande continued to grow with key creditor meetings being canceled, the inability to issue new debt, and missed bond payments. Hong Kong courts are scheduled to hold a winding-up petition hearing on October 30th, which could potentially lead to the liquidation of the company. Some offshore creditors have already expressed their support for liquidation if Evergrande fails to present a viable restructuring plan by the end of October.

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