China: The trading of Evergrande, a Chinese real estate company, has been halted in Hong Kong. It comes due to reports suggesting that the company’s chairman is under police surveillance amidst the ongoing crisis.
Following recent reports this week, it appears that additional current and former executives have been taken into custody.
In August 2023, the company filed for bankruptcy in New York to safeguard its US assets while negotiating a major deal worth billions with its creditors.
The current pause in market trading comes only a month after the company’s earlier 17-month trading suspension was lifted.
Evergrande once considered the world’s most valuable property developer, is now at the heart of a real estate crisis that poses a threat to the world’s second-largest economy.
Having a debt exceeding $300 billion, the company has been working urgently to generate funds by selling assets and shares to settle payments to suppliers and creditors.
The majority of Evergrande’s debt is owed to individuals in China, including many regular citizens whose homes have not been completed.
In 2021, when the company failed to meet its massive debts, it caused significant concern in worldwide financial markets. This is because the property sector makes up about a quarter of China’s economy.
In the past year, numerous major developers in the country have also failed to meet their financial obligations, and many are facing challenges in securing funds to finish their projects.
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