Trading of shares in Chinese real estate giant Evergrande and its two subsidiaries was halted in Hong Kong on September 28. The Hong Kong Stock Exchange suspended trading without providing an immediate explanation for the move.
This suspension came after reports from Bloomberg News suggested that Evergrande's chairman, Hui Ka Yan (also known as Xu Jiayin), was placed under "residential surveillance" by Chinese authorities. The company's shares had already been on a downward spiral, closing 19% lower on September 27 in the Hong Kong market. This decline marked an 81% decrease in share value since trading resumed in late August.
Evergrande, once China's largest real estate firm, faced a major financial crisis that led to its default in 2021. By the end of June, the company's estimated debt had reached $328bn, making it the world's most indebted real estate developer. In August, Evergrande filed for bankruptcy protection in the United States to safeguard its American assets.
In recent developments, Evergrande reported difficulties issuing new debt due to an ongoing investigation into its main domestic subsidiary, Hengda Real Estate Group Co Ltd. Additionally, police in Shenzhen had detained some staff from Evergrande's wealth management unit earlier in September.
The ongoing crisis surrounding Evergrande has had ripple effects on China's economy, particularly in the property market, which has been a significant drag on the country's economic growth.
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