China Evergrande's troubles mount as chairman is suspected of 'illegal crimes'
- Evergrande revealed that its director and executive chairman Hui Ka Yan "has been subject to mandatory measures in accordance with the law due to suspicion of illegal crimes."
- The company also released a filing regarding the status of its subsidiary Hengda Real Estate Group, which failed to pay an onshore bond payment on Monday.
A day after China Evergrande's shares were suspended in 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 a statement to the Hong Kong Stock Exchange late Thursday.
As such, the company's shares will remain suspended until further notice.
This follows a Bloomberg report on Wednesday that said Hui had been "placed under police control."
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 filing regarding 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 its equity 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 2021 and its shares were suspended in March last year. They only just resumed trading in late August after a 17 month hiatus.
Just this week, Evergrande said that due to an investigation into Hengda it 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 in a filing "the sales of the Group has not been as expected by the company," since its March 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 Journey applied for Chapter 15 bankruptcy protection in a U.S. court.