BackChina Evergrande shares suspended, China may have some learnings from US, India says Uday Kotak
China Evergrande halts trading in Hong Kong and its EV and property divisions, possibly due to founder's arrest.
PremiumChina Evergrande Group decided to halt trading in Hong Kong as well as its electric vehicle and property services divisions, following a Bloomberg report that founder Hui Ka Yan had been arrested by authorities.
According to Bloomberg's news report, no explanation for the halt was provided in a notice to the Hong Kong stock exchange on Thursday.
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Hui was hauled away earlier this month, according to Bloomberg, and is currently being watched at a certain location. Hui is allegedly under "residential surveillance," a police tactic that does not constitute formal custody or arrest and does not imply that Hui will be charged with a crime. The reason for this is unclear.
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The action comes after authorities earlier this month detained some employees at the developer's wealth management section and two former executives were also detained, according to Caixin, and is the latest indication that the case at the most indebted developer in the world has entered a new phase involving the criminal judicial system, said Bloomberg in its report.
It raises more concerns about what will happen to Evergrande in light of recent setbacks to its restructuring plan that have shaken financial markets and increased the possibility of a liquidation.
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Evergrande China eventually implodes, said Uday Kotak, Founder & Director of Kotak Mahindra Bank on X (previously Twitter). Two years following the initial reports of problems. Acting by policymakers appears to have taken a while. China might learn from what happened in the US after Lehman and in India after IL&FS.
Also Read: Evergrande Chairman Hui under police control as China's property crisis deepens: Report
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