Shares of embattled developer China Evergrande Group plunged 25 percent on Monday after mainland police detained some staff at its wealth management unit, suggesting a new investigation that could add to the property company's woes.
Evergrande, the world's most indebted property developer, is at the centre of a crisis in China's real estate sector that has seen a string of defaults since late 2021 that have rattled global markets and sparked fears of contagion.
Trading in the company's stock was suspended for 17 months until August 28.
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.
"Recently, public security organs took criminal compulsory measures against Du and other suspected criminals at Evergrande Financial Wealth Management Co," police in Shenzhen said in a social media statement on Saturday night.
The stock fell as much as 25 percent to HK$0.465 in early morning trade, the lowest in two weeks.
Last month, the Chinese developer posted a January-June net loss of 33 billion yuan, versus a 66.4 billion yuan loss in the same period the previous year.
Earlier this month, Evergrande said it had delayed making a decision on offshore debt restructuring from September to next month to allow holders of its debt more time to consider its restructuring plan. (Reuters)