Government pressure on China Evergrande is growing and is fueling fears of the real estate company collapsing. Company founder Hui Ka Yan was recently picked up by the police and is under surveillance at a location, the news agency wrote Bloomberg citing insiders. The reason is unclear. Police supervision is not considered a formal arrest or detention and does not mean that Hui is facing imminent charges.
Neither Evergrande nor the police headquarters of Guangdong province, where the real estate group is based, nor the Ministry of Security could be reached for comment. However, two insiders said that Hui stopped communicating with employees a few days ago and could not be reached. A few days ago, several managers of the Evergrande subsidiary Hengda were arrested. The investigations against Hengda endanger the planned debt restructuring. One of the cornerstones is the exchange of old debts for new bonds. Because of Hengda, Evergrande is not allowed to issue any new debt securities for the time being.