The chairman of China Evergrande Group, Hui Ka Yan, has reportedly been placed under police surveillance, raising concerns about the future of the embattled developer. According to Bloomberg News, Hui was taken away by police earlier this month and is currently being monitored at a designated location. The reasons for his surveillance are unclear, but it is not considered a formal detention or arrest, and it does not imply that Hui will be charged with a crime. RushHourDaily has not been able to verify this report, and there has been no response from Evergrande or the relevant authorities.
Evergrande is currently facing an unprecedented liquidity crisis and is the world’s most indebted property developer. The company’s financial troubles became public in 2021, leading to defaults on offshore debt obligations. The reported surveillance of Hui comes at a time when Evergrande’s offshore debt restructuring plan is faltering, and the possibility of liquidation is increasing. A major Evergrande offshore creditor group is planning to join a liquidation court petition against the developer if a new debt revamp plan is not submitted by the end of October.
In addition to Evergrande’s troubles, investors are also closely watching another major Chinese developer, Country Garden. The company is facing a bond coupon repayment deadline, adding to its ongoing payment challenges. Country Garden, the country’s top private developer, has been trying to avoid defaults and is expected to delay the coupon payment while working on plans to restructure its offshore debt.
The financial difficulties faced by these property developers have raised concerns about the overall property market in China. Until significant stimulus measures are implemented to boost property sales and inject optimism into the market, default risks will remain high for private and mixed ownership developers.
In conclusion, the surveillance of Evergrande’s chairman and the ongoing challenges faced by Country Garden highlight the precarious situation in China’s property sector. The future of these developers and the broader market depends on the implementation of effective stimulus measures.
