Hong Kong, China– Embattled property giant China Evergrande suspended trading of its shares on the Hong Kong stock exchange on Thursday, according to notices posted by the bourse.
Trading in its two other units — the property services and electric vehicle groups — also stopped “at 9:00 am today”, according to the notices.
The halt in trading comes a day after a Bloomberg report that Evergrande’s billionaire boss Xu Jiayin was being held by police under “residential surveillance”.
Evergrande had only just resumed trading a month ago, after the company was suspended for 17 months for not publishing its financial results.
On Sunday, the firm said it was unable to issue new debt as its subsidiary, Hengda Real Estate Group, was being investigated.
And on Friday it said meetings planned this week on a key debt restructuring plan would not take place, adding it was “necessary to reassess the terms” of the plan in order to suit the “objective situation and the demand of the creditors”.
China’s property sector is a key pillar of growth — along with construction it accounts for about a quarter of GDP — and has experienced a dazzling boom in recent decades.
The massive debt accrued by the industry’s biggest players has, however, been seen by Beijing in recent years as an unacceptable risk for the financial system and overall economic health.
Authorities have gradually tightened developers’ access to credit since 2020, and a wave of defaults has followed — notably that of Evergrande.
Earlier this month, authorities in the southern city of Shenzhen said they had arrested several Evergrande employees, also calling on the public to report any cases of suspected fraud.
Another Chinese property giant, Country Garden, narrowly avoided default in recent months, after reporting a record loss and debts of more than $150 billion.
