China’s leading property company again in financial trouble: debt of US$ 328 billion

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Trading of shares in Chinese property giant Evergrande and its two subsidiaries was suspended in Hong Kong on Thursday. A market statement on the Hong Kong Stock Exchange did not explain why trading in Evergrande Group’s securities and share certificates of Evergrande Property Services Group and Evergrande Electric Vehicle Group was halted.

However, the suspension came after Bloomberg News reported that Evergrande’s Hui Ka Yan, also known as Xu Jiayin, was being held by police under “residential surveillance.”

The company’s shares ended down 19% on Wednesday in the Hong Kong market, taking their losses to 81% since the resumption of trade in late August.

The property giant only resumed trading 17 months after the Hong Kong Stock Exchange suspended it in March 2022 for failing to publish its 2021 financial results.

It was once China’s biggest real-estate firm but defaulted in 2021.

At the end of June, Evergrande had an estimated debt of US$ 328 billion, making it the world’s most heavily indebted real estate developer. It filed for bankruptcy protection in New York in August to protect its US assets.

Over the weekend, it reported it could not issue new debt due to an ongoing investigation into its main domestic subsidiary, Hengda Real Estate Group Co Ltd.

Earlier in September, police in Shenzhen, a southern Chinese city, said they had detained some staff at China Evergrande Group’s wealth management unit.

China’s economic growth is being dragged down by the property market crisis centred around Evergrande.

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