Shares in the world’s most indebted Chinese developer Evergrande crashed following news that Chinese police had detained employees of its asset management unit. At the minimum, quotes fell by 25%, to 0.465 Hong Kong dollars ($0.06 at the current rate). But by 10:47 Moscow time, the fall slowed to 1.62%, and the price of securities recovered to 0.61 Hong Kong dollars (just under $0.08).
The arrests point to a new investigation into Evergrande, which could deepen the company’s woes. writes Reuters. Shenzhen City Police on Saturday, September 16, said that law enforcement authorities had taken action against a number of Evergrande Financial Wealth Management employees, including Du Liang, who was named CEO of Evergrande’s wealth management division in 2021. The police statement did not indicate the number of people detained or the charges against them.
Evergrande Financial Wealth Management reported Aug. 31 that the company’s asset disposal process was not going as expected and funds had not been received. Therefore, the company was unable to make payments on debts for that month. transmits The Wall Street Journal.
Amid news of the arrests, shares of other Chinese developers also declined. The industry index lost more than 2%, notes Bloomberg.
Evergrande announced default in 2021. Trading in the developer’s shares in Hong Kong was suspended from March 21, 2022 to August 27, 2023. On August 28, the first day of trading after a 17-month pause, Evergrande’s quotes plummeted by almost 87%. Subsequently, extreme volatility remained in the securities – for example, at the auction on September 6, the securities rose in price by more than 80%.
The company’s total liabilities at the end of June this year amounted to 2.39 trillion yuan ($327.8 billion at the current exchange rate). A decision on debt restructuring was expected to be made in September, but Evergrande earlier this month pushed the deadline to October. The company explained this by a desire to give debt holders more time to consider the restructuring plan.
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2023-09-18 08:39:06
