Chairman of Evergrande Real Estate Group, Hui Ka Yan, is reportedly under police surveillance, according to Bloomberg News. This development adds further pressure on the troubled Chinese developer, which has already been facing significant challenges this week.
Sources familiar with the matter revealed that Hui was taken away by the police earlier this month and is currently being monitored at a designated location. The reasons behind his residential surveillance remain unclear, and the move does not necessarily imply that Hui will be charged with a crime. However, it indicates that the authorities are closely scrutinizing Evergrande and its leadership.
As of now, Reuters has not been able to verify the Bloomberg report, and Evergrande has not responded to requests for comment. The company is currently the most indebted property developer in the world and is at the center of China’s ongoing property crisis. The Chinese property sector has been witnessing a spate of debt defaults since late 2021, which has had a significant impact on the country’s economy.
Evergrande recently created fresh concerns when it announced that it would not be able to issue new bonds as part of its offshore debt restructuring plans due to a regulatory investigation into its main Chinese unit, Hengda Real Estate. Furthermore, on Monday, Hengda stated that it had failed to pay the principal and interest on a 4 billion yuan ($547 million) bond by the September 25 deadline.
In a separate report, Reuters mentioned that some of Evergrande’s offshore creditors are planning to join a liquidation court petition against the company if it fails to submit a new debt revamp plan by the end of October. The situation has heightened market anxieties, with investors closely monitoring another major Chinese developer, Country Garden, which is facing a bond coupon repayment deadline on Wednesday.
The developments surrounding Evergrande and its chairman highlight the deepening troubles faced by the Chinese property sector. The outcome of these events will not only have ramifications for the company and its stakeholders but also reverberate across the wider economy. As this situation unfolds, market dynamics and investor sentiment will be key factors to watch.