The China Evergrande Group logo is displayed on a phone screen in this illustration photo taken on September 27, 2021.
Jakub Porzycki | Photo only | Getty Images
A day after China Evergrande’s shares were suspended in Hong Kong, the embattled Chinese real estate company announced that its director and chief executive are under surveillance for alleged criminal offenses.
Mandatory measures in accordance with the law have been imposed on Hui Ka Yan on suspicion of illegal offenses, Evergrande said in a statement to the Hong Kong Stock Exchange late Thursday.
Therefore, the company’s shares remain suspended until further notice.
This follows a Bloomberg report on Wednesday that said Hui had been “placed under police control.”
Bloomberg, citing people familiar with the matter, said Hui was taken away by Chinese police earlier this month and is being monitored at a specific location.
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Late Thursday, Evergrande released a separate filing on the status of its subsidiary Hengda Real Estate Group, which most recently failed to pay the principal and interest on a 4 billion yuan ($547 million) bond due on September 25.
Evergrande said Hengda had a total of 1,946 lawsuits pending at the end of August, each involving more than 30 million yuan, with the total amount amounting to about 449.298 billion yuan ($61.61 billion).
Hengda’s total unpaid debt was about 278.53 billion yuan, and its overdue commercial invoices were about 206.777 billion yuan.
In the same filing, Evergrande said there were 163 new enforcement cases against Hengda Real Estate in August, totaling about 9.13 billion yuan, but did not elaborate on the nature of the cases.
Hengda also recorded 68 new cases in which its equity interests in subsidiaries and investees were frozen due to enforcement actions against the company.
Evergrande was once China’s largest private project developer in terms of sales.
The world’s most indebted real estate company defaulted in 2021 and its shares were suspended in March last year. They only resumed trading at the end of August after a 17-month break.
Just this week, Evergrande said it was unable to issue new bonds as part of its debt restructuring plan due to an investigation into Hengda.
It also delayed a debt restructuring meeting with creditors scheduled for Monday, saying in a statement that “the group’s sales have not met the company’s expectations since the debt restructuring announcement in March.”
Therefore, Evergrande “considers it necessary to reassess the terms of the proposed restructuring in order to meet the objective situation of the company and the demands of creditors.”
In August, Evergrande, along with its subsidiary Tianji Holdings and its subsidiary Scenery Journey, filed for Chapter 15 bankruptcy protection in a U.S. court.