Evergrande says chairman under investigation over suspected 'illegal crimes'
By Scott Murdoch and Ziyi Tang
HONG KONG/BEIJING (Reuters) -China Evergrande Group's founder is being investigated over suspected «illegal crimes», the embattled developer said on Thursday, as creditors become increasingly concerned about the group's prospects amid an uncertain debt revamp plan and liquidation risk.
The world's most indebted property developer with more than $300 billion in total liabilities did not say whether Hui Ka Yan was still in a position to run the company, or what crimes he is being investigated for.
Trading in shares of the company was suspended earlier in the day after a report that its chairman had been placed under police watch. Evergrande said the shares will remain suspended until further notice.
«The Company hereby announces that the Company has received notification from relevant authorities that Mr. Hui Ka Yan… has been subject to mandatory measures in accordance with the law due to suspicion of illegal crimes,» Evergrande said.
The news signals for the first time that authorities could hold the billionaire Evergrande founder accountable for the developer's financial woes, which have ripped through the property sector that accounts for roughly a quarter of the Chinese economy.
Deepening turmoil in China's debt-laden property sector is threatening to undermine Beijing's efforts to get the sputtering economy back on more solid footing, and raising fears among investors of a spillover into the country's banking system.
The latest development is a major blow to China's once top-selling developer that has lurched from one crisis to another since its cash squeeze became public in 2021 and it defaulted on its offshore debt obligations later that year.
«It is unclear why Hui is under police
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