The Wall Street Journal reported that China Evergrande Group Chairman Hui Ka Yan is being investigated for allegedly transferring assets offshore while the company struggles to complete unfinished projects. Evergrande has been seeking creditors’ approval to restructure its offshore debt, but the process has become more complicated due to an investigation into its main China unit. In addition to these challenges, the company announced that its chairman is under police watch and suspected of committing unspecified crimes.
Last week, Reuters revealed that a group of offshore creditors is planning to join a court petition to liquidate Evergrande if the company fails to submit a new debt restructuring plan by the end of October. The company has not yet responded to these reports. With over $300 billion in liabilities, Evergrande has become the face of the debt crisis plaguing China’s property sector, which accounts for a significant portion of the country’s economy. Trading in Evergrande shares and two of its units was suspended after news broke that the chairman had been taken away by police for monitoring at a designated location.
In conclusion, Evergrande’s chairman is under investigation for allegedly transferring assets offshore, adding to the company’s existing challenges in completing projects and restructuring its debt. The company is facing pressure from offshore creditors who are planning to petition for liquidation if a new debt restructuring plan is not submitted soon. Evergrande’s massive liabilities make it a symbol of the debt crisis in China’s property sector. Trading in the company’s shares has been suspended as the chairman remains under police watch.
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