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Business News/ News / World/  Chinese authorities detain Evergrande staff amid crisis in property market

Chinese authorities detain Evergrande staff amid crisis in property market

Chinese authorities have detained personnel from Evergrande's financial subsidiary.

Evergrande is navigating through what is termed as the largest restructuring in the history of China.

Chinese authorities have escalated their involvement in the ongoing Evergrande crisis, detaining personnel from the property giant’s financial subsidiary. The Shenzhen police disclosed the detentions in a social media statement on September 16 evening but provided minimal details. Among the detainees, only one was partially identified — someone with the surname 'Du', Bloomberg reported.

Evergrande is navigating through what is termed as the largest restructuring in the history of China. However, critical decisions concerning its offshore debt overhaul have been delayed till October, leaving the process in a state of uncertainty.

Also Read: $188 billion exodus: Massive retreat of funds from Chinese stocks and bonds diminishes dragon's global clout

Evergrande sits squarely in the centre of a credit crisis affecting China's property market and has repercussions on the overall growth of the world’s second-largest economy.

The detained individuals, as per Bloomberg, are part of Evergrande Financial Wealth Management Co., an entity fully owned by China Evergrande Group. Located in Shenzhen, this subsidiary was set up in 2015 and has been managed by Du Liang, although it remains unconfirmed if he is among those detained.

The detainments come against a backdrop of considerable financial chaos. In 2022, the beleaguered firm was unable to honour payments amounting to 40 billion yuan ($5.6 billion) for its wealth management products. This triggered nationwide protests and intensified the scrutiny from Beijing, as the firm had drawn funding from over 70,000 investors, including its own employees, as per Bloomberg.

Also Read: China's indebted property developer Evergrande Group H1 net loss declines to $4.5 billion

The police have announced that their probe into the financial arm of Evergrande is still active. Investors have been urged to assist in the investigation by filing online complaints and providing relevant information.

China's government has taken charge of Evergrande’s insurance division. Evergrande Life Assurance Co. will now be managed by state-supported Hai Gang Life, as announced by the National Administration of Financial Regulation on September 15.

(With Bloomberg inputs)

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ABOUT THE AUTHOR

Sounak Mukhopadhyay

Sounak Mukhopadhyay, who also goes by the name Sounak Mukherjee, has been producing digital news since 2012. He's worked for the International Business Times, The Inquisitr, and Moneycontrol in the past. He's also contributed to Free Press Journal and TheRichest with feature articles. He covers news for a wide range of subjects including business, finance, economy, politics and sports. Before working with digital news publications, he worked as a freelance content writer.
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