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China police detain some Evergrande wealth management staff

7 months ago 30

Police in southern China have detained some employees of China Evergrande Group’s wealth management branch, implying a fresh probe that might exacerbate the property giant’s problems.

“Recently, public security organs took criminal compulsory measures against Du and other suspected criminals at Evergrande Financial Wealth Management Co.,” Shenzhen city police said in a social media statement on Saturday night.

During disgruntled investors’ rallies at Evergrande’s Shenzhen offices in 2021, workers recognised Du Liang as the general manager and legal representative of Evergrande’s wealth management business.

Reuters was unable to establish if Du was among those held, and the police statement did not detail the number of persons detained, the accusations against them, or the date they were arrested.

China Evergrande did not immediately react to a comment request made outside of usual business hours on Sunday.

The investigation into the financial management section is still underway, according to the police, who have asked investors to report any future financial offences.

China Evergrande, the world’s most indebted property developer, is at the centre of a crisis in China’s property sector, which has seen a string of debt defaults since late 2021 that has dragged on the growth of the world’s second-largest economy.

The group, currently undergoing a protracted debt restructuring which has seen it offload a range of assets, said on Friday it has delayed making a decision on offshore debt restructuring from September to next month.

Trade in Evergrande’s stock was suspended for 17 months until Aug. 28.

Moody’s on Thursday cut the outlook on China’s property sector to negative from stable, citing economic challenges it said would dampen sales despite government support.

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