A Monday Wall Street Journal report indicated that Hui Ka Yan, the China Evergrande Group chairman, is being investigated for alleged offshore asset transfers. These allegations follow the company’s crumbling finances as it battles to complete projects.
Reuters reports that Evergrande has sought creditors’ approval to reorganise its offshore debts. A probe into the main China unit, however, complicated this endeavour. The newsagent indicated how a group of offshore debtors planned to obtain a legal petition to liquidate the developer if it did not restructure its debt repayment plan.
On Friday, 29th September, the media stream reported on rumours that the police were keeping an eye on the Evergrande chairman for suspected illegal activities. No details about these activities or the nature of their illegality were made available.
CNBC News indicated that Evergrande suspended trading last Thursday after Hui came under surveillance. Previously, the group ceased share trading in March 2022 and resumed market activities on 28th August this year.
Experts believe Evergrande epitomises the true nature of a China debt crisis as the company sits with more than $300bn in liabilities. In this country, the property sector makes up about a quarter of the overall economy.
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Reportedly, Hui has been taken away by police and is now being watched at a designated location. Bloomberg stated the reasons for this residential surveillance are unclear and does not necessarily mean Hui was charged with a crime. The chairman can, however, not leave the designated location and needs approval for all communications.
