BEIJING (Reuters) – Police in southern China have arrested some employees of China’s Evergrande Group’s wealth management unit, suggesting a new investigation could add to massive problems at the property.
“Recently, public security organs have taken criminal enforcement measures against Du and other criminals at Evergrande Financial Wealth Management Co.,” Shenzhen City Police said in a social media statement Saturday night.
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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.
China Evergrande did not immediately respond to a request for comment outside regular business hours on Sunday.
The police said that the investigation is underway at the Financial Management Unit and urged investors to report more financial crimes.
China Evergrande, the world’s second largest economy, is in the midst of a crisis in China’s property sector, which has seen multiple debt defaults since the end of 2021.
The group, which is currently undergoing an extended debt restructuring process that has seen it divest various assets, reported on Friday that it would make a decision on an offshore debt restructuring from September to next month.
Trading in Evergrande shares was suspended for 17 months until August 28.
Moody’s cut its outlook on China’s property sector to negative from stable on Thursday, citing economic problems that it said would dampen sales despite government support.
(Reporting by Lori Chen and David Kirton in Shenzhen; Editing by Tom Hogg)
