17th September 2023 – (Shenzhen) Authorities in Shenzhen have taken criminal action against Du and other individuals suspected of involvement in financial crimes at Evergrande Wealth Management (Shenzhen) Co., Ltd., commonly known as Evergrande Wealth. Du, who serves as the legal representative, executive director, and general manager of Evergrande Wealth, has come under scrutiny for alleged financial irregularities.
According to a statement by the Shenzhen police on their official social media account, “Recently, public security organs took criminal coercive measures against Du and other suspected criminals at Evergrande Financial Wealth Management Co.” Du Liang, identified as the general manager and legal representative of Evergrande’s wealth management division, was previously involved in protests by disgruntled investors at Evergrande’s Shenzhen headquarters in 2021.
The investigation into Evergrande Wealth’s financial management activities is ongoing, according to the police statement. The exact charges, the number of individuals detained, and the date of their detention were not specified in the statement, and Reuters could not independently confirm if Du was among those detained.
China Evergrande Group, the world’s most indebted property developer, has been facing significant challenges amid a crisis in China’s property sector. The sector has witnessed a series of debt defaults since late 2021, adversely impacting the growth of the world’s second-largest economy.
Evergrande, currently undergoing a complex debt restructuring process and divesting various assets, announced on Friday that it would postpone its decision on offshore debt restructuring until next month, extending the deadline from September. The company’s stock trading was suspended for 17 months until 28th August.
In response to the ongoing investigation, China Evergrande has not yet issued a comment. The authorities continue to encourage investors to report any additional financial crimes as the investigation into Evergrande Wealth Management progresses.
Moody’s, a credit rating agency, recently downgraded the outlook on China’s property sector from stable to negative. The downgrade was attributed to economic challenges that are expected to dampen sales, despite government support.
The situation surrounding Evergrande Wealth Management and the wider challenges faced by China’s property sector have drawn significant attention both domestically and internationally. Stakeholders and market observers will closely monitor further developments as authorities continue to investigate the alleged financial irregularities and the impact on the affected investors.