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China: Police arrest Evergrande employees


Highlights: "Several" employees of Evergrande have been arrested, police say. The company is one of China's leading real estate developers. The group's debt is estimated to be more than $1.5 billion. It is the second major Chinese real estate group to be hit by a debt crisis in recent years. The first was China's Guangdong Province, which is in the throes of a financial crisis. The second is China's Gansu Province, in the middle of an economic crisis.

The debt of the real estate group has reached such levels that the authorities have decided to put a stop to it.

Police in Shenzhen, China, announced Saturday the arrest of "several" employees of a subsidiary of the real estate group Evergrande, whose astronomical debt has largely contributed to the crisis of this key sector of the Chinese economy.

The arrests target employees of the financial subsidiary Evergrande Wealth Management, police said, adding that "mandatory criminal measures" had been taken "against Du Liang and other alleged criminals," without indicating their number or what they are accused of. The public is also invited to "report" to the authorities any "case" of suspected fraud.

Du Liang was identified as the head of Evergrande's wealth management division during protests by disgruntled investors at Evergrande's headquarters in Shenzhen in 2021, Reuters reported.

The real estate sector in China has experienced tremendous growth in recent decades. But the indebtedness of the groups has reached such levels that the authorities decided in 2020 to put a stop to it. The crisis has spread in recent months to Country Garden, the other real estate heavyweight, long considered financially sound. And, on Friday, the state-owned Sino-Ocean group, based in Beijing, announced that it was suspending repayments of its loans contracted outside China, given its financial health. Also on Friday, Evergrande, whose slate was estimated at the end of June at more than 300 billion euros, said it was postponing a decision on restructuring its debt abroad.

Source: lefigaro

All business articles on 2023-09-17

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