Police in China have arrested several employees of a subsidiary of troubled Chinese property giant Evergrande Group (恆大集團), authorities said on Saturday.
Employees at Evergrande’s financial subsidiary, Evergrande Financial Wealth Management Co (恒大金融財富管理), were arrested, police in the southern city of Shenzhen said in a statement, without specifying the number of employees or the charges against them.
The statement called on the public to report any cases of suspected fraud to the authorities.
Photo: AFP
Evergrande’s enormous debt has contributed to the country’s deepening property market crisis, raising fears of a global spillover.
The property sector, which along with construction accounts for about a quarter of China’s GDP, is a key pillar of the country’s growth and has experienced a dazzling boom in recent decades.
However, the massive debt accrued by the industry’s biggest players — Evergrande had estimated debt of US$328 billion (307 billion euros) at the end of June — has been seen by Beijing in recent years as an unacceptable risk for China’s 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.
Another Chinese property giant, Country Garden Holdings Co (碧桂園), has narrowly avoided default in recent months, after reporting a record loss and debts of more than US$150 billion.
State-backed developer Sino-Ocean Group Holding Ltd (遠洋集團) on Friday announced it would suspend payments of offshore debts, the latest company to show signs of trouble.
Meanwhile, Moody’s rating agency on Thursday downgraded the outlook for China’s property sector from “stable” to “negative,” arguing that the government support measures will have only a short-term impact.
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