Evergrande Chairman Hui under police control as China's property crisis deepens: Report | Mint
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Business News/ News / World/  Evergrande Chairman Hui under police control as China's property crisis deepens: Report
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Evergrande Chairman Hui under police control as China's property crisis deepens: Report

Billionaire chairman of China Evergrande, Hui Ka Yan, has been placed under police control, but it is unclear why.

Evergrande’s Billionaire Chairman Hui is under police surveillance. Premium
Evergrande’s Billionaire Chairman Hui is under police surveillance.

Hui Ka Yan, the billionaire chairman of beleaguered property developer China Evergrande Group, has been placed under police control. He was taken away by Chinese police earlier this month, according to a report published by Bloomberg.

Currently, Hui is being monitored at a designated location. However, it's not yet clear why Hui is under so-called residential surveillance – a type of police action that falls short of formal detention or arrest. 

It is pertinent to note that residential surveillance doesn't mean HHui will be charged with a crime. The measure means he is unable to leave the location, meet, or communicate with others without approval, based on China’s Criminal Procedure Law. 

As per the law, passports and identification cards must be handed to police but the process should not exceed six months. The move is the latest sign that the saga at the world’s most indebted developer has entered a new phase involving the criminal justice system. 

This came after Chinese authorities escalated their involvement in the ongoing Evergrande crisis and detained 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.

Evergrande sits squarely in the center 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 honor 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.

 

(With Bloomberg inputs)

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Published: 27 Sep 2023, 09:20 AM IST
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