China Evergrande’s troubles mount as chairman is suspected of ‘illegal crimes’

A day after ChinaEvergrande’s shares were suspendedin Hong Kong، the beleaguered Chinese property firm revealed that its director and executive chairman is under scrutiny over suspected crimes.

Hui Ka Yan “has been subject to mandatory measures in accordance with the law due to suspicion of illegal crimes،” Evergrande said in astatement to the Hong Kong Stock Exchangelate Thursday.

As such، the company’s shares will remain suspended until further notice.

This follows aBloomberg reporton Wednesday that said Hui had been “placed under police control.”

Hui monitored at a designated location

Bloomberg said that Hui was taken away by Chinese police earlier this month and is being monitored at a designated location، citing people familiar with the matter.

Late Thursday،Evergrande released a separate filingregarding the status of its subsidiary Hengda Real Estate Group، which most recently failed to pay the principal and interest for a 4 billion yuan ($547 million) bond that was due Sept. 25.

Evergrande said that as of end-August، Hengda had a total of 1،946 pending litigation cases which involved more than 30 million yuan each، with the total amount involved of approximately 449.298 billion yuan ($61.61 billion).

Total unpaid debts from Hengda amounted to approximately 278.53 billion yuan، with overdue commercial bills of about 206.777 billion yuan.

In the same filing، Evergrande revealed there were 163 new enforcement cases against Hengda Real Estate in August، involving a total amount of approximately 9.13 billion yuan، although it did not elaborate on the nature of the cases.

Hengda also saw 68 new cases where itsequity interest in subsidiaries and investee companies were frozen as a result of enforcement actions against it.

Evergrande was at one time China’s largest private sector developer by sales.

The world’s most indebted real estate company defaulted in 2021and its shares were suspended in March last year. They only just resumed trading in late August after a 17 month hiatus.

Debt restructuring plan

Just this week، Evergrande said that due toan investigation into Hengdait was unable to issue new notes under its debt restructuring plan.

It also delayed a debt restructuring meeting with creditors that was due Monday، saying ina filing“the sales of the Group has not been as expected by the company،” since itsMarch debt restructuring announcement.

As such، Evergrande “considers it necessary to re-assess the terms of the proposed restructuring to meet the company’s objective situation and the demand of the creditors.”

In August، Evergrande، along with affiliate Tianji Holdings and its subsidiary Scenery JourneyappliedforChapter 15 bankruptcy protectionin a U.S. court.