Police have detained employees of the money management system of troubled property developer Evergrande in the southwestern city of Shenzhen.
However, it was announced on Friday that a newly formed state-owned underwriter would take over the company’s insurance division.
Evergrande is at the center of a issue that has gripped the real estate sector in China since 2021.
Shenzhen Nanshan District Police Bureau reported on Saturday that” lately, public safety organizations took criminal mandatory measures against Du and another suspected criminals at Evergrande Financial Wealth Management Co.”
Other than the man who was only identified as Du, no additional information was provided regarding the number of people who were detained, their identities, or the possible charges they might encounter.
Police added that the situation is still being looked into and that owners could complain to the authorities.
Evergrande Financial Wealth Management Co. was founded in 2015 and has its headquarters in Shenzhen. It is a wholly-owned company.
Du Liang is Evergrande Financial Wealth Management’s public administrator, according to his LinkedIn profile. The BBC was unable to confirm whether he was one of the people being held by the authorities.
When the BBC asked Evergrande for reply, he did not respond right away.
After recovering from a loss of 25 % in early trade, Evergrande shares were down by about 3 % at lunchtime on Monday.
Beijing has been making it harder and harder for real estate developers to obtain funds since 2020.
Evergrande, once one of China’s largest corporations, had amassed debts totaling more than$ 300 billion(£ 242 billion ) as it grew quickly.
After defaulting on its debt and suffering significant losses, it is now attempting to rebuild its company.
Another well-known Chinese real estate developers, such as Country Garden and Sino-Ocean, have had trouble making payments on their debts.
The real estate sector in China is a significant component of the second-largest economy in the world.
Some experts worry that the sector’s problems could threaten to weaken the market and spread to other financial markets around the world.
For more than two decades, Beijing has also been cracking down on alleged financial business problem.
