HONG KONG: Following the arrest of several of the debt-ridden company’s employees in China on Monday( Sept 18 ), shares of troubled developer China Evergrande Group fell 25 % as markets opened in Hong Kong.
Early morning trading saw Evergrande’s share price fall to HK$ 0.47, the lowest level in two days. By 10 a.m. local time, it had reduced losses by 11 % while the larger Hang Seng Index had fallen by 0.9 %.
The decrease occurred two weeks after authorities in the southwestern Chinese city of Shenzhen reported in a statement that some Evergrande Wealth Management people had been detained.
The number of people or the accusations leveled against them were not disclosed by the authorities.
The government was urged to file any suspected fraud cases in the speech.
At the end of June, Evergrande, the most indebted real estate developer in the world with an estimated debt of$ 328 billion, was at the center of China’s worsening market turmoil, raising concerns about a global overflow.
Up until August 28th, dealing in the company’s share was halted for 17 months.
Beijing has viewed Evergrande’s massive bill, which was once a major player in an industry crucial to China ‘ economic growth, as an intolerable threat to the nation” financial system.
Since 2020, officials have eventually restricted developers’ access to credit, and a flood of failures has followed, most notably that of Evergrande.
The federal financial regulator of China approved on Friday a fresh state-owned automobile Haigang Life Insurance to take over Evergrande’s bankrupt insurance subsidiary.