- Police Detain Members of Evergrande’s Wealth Management Unit in Shenzhen
- Evergrande’s Insurance Division to Be Acquired by State-Owned Insurer
- China’s Real Estate Crisis Continues to Impact Major Developers
Police in Shenzhen, southern China, have detained members of the wealth management unit of the embattled developer Evergrande.
In a social media post, police urged the public to disclose any suspected instances of fraud.
On Friday, it was announced that the firm’s insurance division would be acquired by a newly constructed state-owned insurer.
Since 2021, Evergrande has been at the center of a crisis that has enveloped China’s real estate industry.
Shenzhen Nanshan District Police Bureau stated on Saturday, “Recently, public security organs took criminal compulsory measures against Du and other suspected criminals at Evergrande Financial Wealth Management Co.”
No additional information was provided regarding the number of individuals detained, their identities – except Du – or the potential offenses they may face.
Additionally, police stated that the case is still under investigation and that investors may file complaints with the authorities.
Evergrande Financial Wealth Management Co. is an Evergrande subsidiary that was founded in 2015 and is headquartered in Shenzhen.
Du Liang is the general manager of Evergrande Financial Wealth Management, per his LinkedIn profile.
According to a proposal announced by China’s National Administration of Financial Regulation (NAFR) on Friday, the assets and liabilities of Evergrande Life Assurance will be assumed by the state-owned Haigang Life Insurance Co., Ltd.
After recovering from a 25% loss earlier in the day, shares of Evergrande were trading unchanged on Monday afternoon.
Beijing has made it increasingly difficult for real estate developers to obtain credit since 2020.
As one of China’s largest corporations, Evergrande amassed more than $300 billion (£242 billion) in debts during its rapid expansion.
After defaulting on its debts and incurring enormous losses, the company is attempting to restructure its business.
Other major Chinese real estate developers, such as Country Garden and Sino-Ocean, have struggled to satisfy their debt obligations.
China’s real estate sector is vital to the world’s second-largest economy.
Some experts are concerned that the sector’s crisis could destabilize the economy and spread to the global financial markets.
Beijing has also been conducting an anti-corruption campaign in China’s financial sector for over two years.
Executives have been punished severely, including with the death penalty.