HONG KONG (Reuters) – Shares in beleaguered developer China Evergrande Group plunged 25 percent after police arrested some employees at its wealth management unit on Monday.
Evergrande, the world’s most indebted nation, has been among the biggest defaulters in the crisis in China’s real estate sector, which has rocked global markets and sparked fears of contagion since late 2021. Trading in the company’s stock was suspended for 17 months until August 28.
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“Recently, public security organs have taken criminal enforcement measures against Du and other suspected criminals at Evergrande Financial Asset Management Company,” police in the southern city of Shenzhen said in a social media statement Saturday night.
Reuters could not confirm whether Du was among those arrested, and the police statement did not specify the number of people arrested, their charges or the date of their arrest.
Evergrande did not respond to a request for comment on the police action.
The stock fell as much as 25% to HK$0.465 in morning trade, its lowest in two weeks. By 0200 GMT, it was down 11%, compared with a 0.9% decline for the broader Hang Seng index.
Last month, the Chinese developer posted a net loss of 33 billion yuan ($4.5 billion) from January to June, compared with a loss of 66.4 billion yuan in the same period last year.
Earlier this month, Evergrande said it would delay a decision on the offshore debt restructuring until next month, starting in September, to allow its creditors to consider the restructuring plan.
($1 = 7.2799 Chinese Yuan Renminbi)
(Reporting by Donnie Kwok, Editing by Ann Marie Rowntree, Muralikumar Anatharaman and Lincoln Fest.)