Trading in shares of troubled Chinese developer Evergrande is suspended again

Today on the Hong Kong Stock Exchange there were suspended trading in shares of the Chinese construction company China Evergrande Group, which has debts of about $330 billion. This happened after the company’s quotes collapsed by 20% yesterday due to messages that the founder and chairman of the board of directors of Evergrande, Xu Jiayin, was detained by the police in early September and is now not formally under arrest, but in a certain place that he cannot leave. According to the country’s criminal procedure law, he is not allowed to communicate or meet with other people without permission from the authorities. All his documents were confiscated.

Evergrande crisis continues from 2021. Then it became known about the holding’s serious financial problems. Company suspended shares trading on March 21, 2022. Evergrande then went through a complex restructuring process and resumed trading on August 28 after a 17-month hiatus. However, already in September, the company’s shares fell twice by more than 20% due to continued investor concerns.

The company has not yet commented on the information about the new suspension of trading in its shares. Police representatives also do not comment on reports of the possible detention of the head of Evergrande.

Kommersant wrote in an article about what consequences the problems of large developers may lead to “China smells of a mortgage crisis”.

Evgeny Khvostik