There is no peace for Evergrande, the Chinese real estate giant at the center of a crisis that seems to have no end. The group's shares are on Monday collapsed by 26% on the Hong Kong Stock Exchange, and then recovered to -1,61%, equal to 51 Hong Kong cents (8 US dollar cents).
The reasons for the collapse of Evergrande: Wealth Management leaders arrested
At the basis of the collapse there is a note with which the Shenzhen police announced they had arrested some over the weekend employees of the financial division Evergrande Wealth Management.
The authorities have not specified how many people are involved or what the charges are against them, but have asked for any useful information to be reported possible fraud.
In the note, the Shenzhen police say that the authorities "have taken coercive measures against some suspects, who include Du and others belonging to the wealth management financial division (Shenzhen) controlled by Evergrande Group".
It is unclear who Du is. It could be DuLiang, general manager and legal representative of Evergrande's wealth management division.
The company has not released any comment on the incident.
The Evergrande crisis
Evergrande has been in the spotlight for years. The company has indeed become the emblem of the crisis which hit the Chinese real estate market. The group entered a downward spiral in 2020, when the Chinese authorities limited its access to credit in the face of the company's soaring debt (it was estimated at $328 billion at the end of June) due to which it is still in progress a heavy restructuring plan.
Since the end of 2021, several companies in the sector in China have gone into default, shaking global markets worried about the possibility of contagion.
