Chinese police swooped and detained staff at China Evergrande Group’s Shenzhen wealth management unit on Saturday night, in what could be a new probe to add to the property giant’s already big set of problems.
The police said the investigation into the financial management unit was ongoing and urged investors to report any further financial crimes.
Shenzhen city police said in a social media statement on Saturday night: “Public security organs took criminal compulsory measures against Du [Liang] and other suspected criminals at Evergrande Financial Wealth Management Co.”
During protests by disgruntled investors at Evergrande’s Shenzhen headquarters in 2021, Du Liang was identified by staff as general manager and legal representative of Evergrande’s wealth management division.
Reuters could not confirm that Du was among those detained, and the police statement did not specify the number of people detained, the charges or the date they were taken into custody.
China Evergrande, the world’s most indebted property developer, is at the centre of a crisis in China’s property sector, which has seen a string of debt defaults since late 2021 that has dragged on the growth of the world’s second-largest economy.
The group, currently undergoing a protracted debt restructuring which has seen it offload a range of assets, said on Friday it has delayed making a decision on offshore debt restructuring from September to next month.
Trade in Evergrande’s stock was suspended for 17 months until August 28.
Moody’s on Thursday cut the outlook on China’s property sector to negative from stable, citing economic challenges it said would dampen sales despite government support.
- Reuters with additional editing by Sean O’Meara