China Evergrande's Shares Suspended After CEO Put Under Police Surveillance

China Evergrande is the poster child of a real estate sector crisis in China
Hui Ka Yan, Evergrande's Chaiman
Hui Ka Yan, Evergrande's Chaiman Getty Images

Trading in shares of beleaguered realty firm China Evergrande were suspended on 28 September after its billionaire CEO was put under "residential surveillance" by the police. The market statement did not provide any reason for the suspension of shares.

The move comes as a heavy blow to the severely indebted property group, which is seen as the poster child of a real estate crisis that has gripped China. Evergrande's liabilities total more than $300 billion, or about the same as Finland's gross domestic product.

Hui Ka Yan, who founded Evergrande in 1996, was taken away by police earlier this month and was being monitored at a designated location, according to Bloomberg.

Earlier in August, the firm filed for bankruptcy in the US, in order to protect its American assets, while working on a multi-billion dollar deal with creditors.

This week, the company's debt problems took a sharp turn for the worse when it revealed that an inquiry into its primary China unit prevented it from issuing fresh debt, further complicating a suggested restructuring strategy.

China has millions of empty properties at the moment.
China has millions of empty properties at the moment.Getty Images

The suspension of trading comes just a month after trading in shares of Evergrande had resumed in late August after a 17-month suspension. The company's stock last closed at HK$0.32.

The firm owes most of its money to people within China, with many of them being common citizens who are still waiting on their homes to be finished.

In July, Evergrande revealed that it had lost a combined 581.9 billion yuan ($79.6 billion) over the post two years.

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