The shares of the ailing Chinese real estate company Evergrande temporarily lost up to 25 percent of their value in trading on the Hong Kong stock exchange on Monday. In southern China, the police had previously arrested several managers from the asset management division of the heavily indebted real estate developer, which was founded in 2015. “Public security organs recently took criminal enforcement action against Du and other suspected criminals at Evergrande Financial Wealth Management Co.,” Shenzhen city police said over the weekend. During protests at Evergrande’s headquarters in 2021, participants named Du Liang as general director and legal representative of the asset management company. However, Reuters news agency could not verify that Du was among those arrested.
Police did not say how many people were arrested or when. She also gave no details about charges. However, she called on investors to report financial crimes. No comment was available from China Evergrande. China Evergrande, the world’s most indebted real estate company, ran into trouble two years ago after China’s real estate bubble burst but has so far avoided a disorderly collapse. In mid-August, it applied for protection from creditors in the USA as part of its restructuring.
Evergrande fell behind on paying 40 billion yuan (5.1 billion euros) for wealth management products in 2021. This sparked nationwide demonstrations and put pressure on Beijing. More than 70,000 investors had invested in Evergrande.