China detains Evergrande employees amid property crisis

Authorities in China have reportedly detained employees of troubled real estate giant Evergrande Group, as the company faces a massive debt crisis.

The Shenzhen police disclosed Saturday (Sept 16) that several staffers employed by Evergrande’s financial arm have been arrested. But police failed to give more details about the detainees and charges pressed against them.

However, Bloomberg reported that one of the detainees has ‘Du’ as his surname.

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Evergrande’s crisis

The real estate giant has been undergoing the biggest restructuring in the history of China, thanks to the massive debt crisis it currently finds itself sitting in.

Decisions regarding its foreign debt overhaul have been delayed though, leaving the fate of the restructuring process hanging in balance.

Evergrande’s crisis is poised to have a far-reaching affect on China’s property market and also threatens to cast a shadow over the overall growth of the economy.

Evergrande’s financial arm

The arrested individuals work for Evergrande Financial Wealth Management Co, a subsidiary of China Evergrande Group. It was established in 2015 and it was helmed by a person named Du Liang.

It was not clear whether or not Du Liang was among the detainees.

Watch:China’s Evergrande reports narrower loss

Meanwhile, police have urged the public to come forward with complaints of fraud and wrongdoings, which might help investigators pursue legal action against the property giant.

Beijing's actions against Evergrande

These detentions come in the backdrop of the financial crisis that Evergrande has been facing since 2021. Last year, the troubled company failed to meet its obligations of 40 billion yuan ($5.6 billion) for its wealth management products, leading to nationwide protests and increased scrutiny from Beijing.

More than 70,000 investors, including employees, have invested in the firm, according to Bloomberg.

The police continue to investigate Evergrande's financial arm, and investors are also encouraged to aid the probe by submitting online complaints and relevant information.

Apart from that, China's government has already assumed control of Evergrande's insurance division. Hai Gang Life, a state-supported entity, will now oversee Evergrande Life Assurance Co., as announced by the National Administration of Financial Regulation on September 15.

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