China Evergrande Group seeks to resume stock trading in Hong Kong on Tuesday following a halt last week after its billionaire founder was put under police control on suspicion of committing undisclosed crimes.
The troubled property group said there’s no other pertinent information that needs to be disclosed, in filings to the local bourse Monday. Shares in the company and units including Evergrande Property Services Group Ltd. were suspended on Thursday, a day after people familiar with the matter said the firm’s founder had been taken away by police.
Authorities in China notified Evergrande last week that chairman Hui Ka Yan has been subject to “mandatory measures” relating to “suspicion of illegal crimes,” according to a company statement. The Shenzhen-based firm didn’t elaborate on what the measures entailed or what crimes he is suspected of committing.
Chinese authorities are investigating whether Hui attempted to transfer assets offshore while the company was struggling to complete unfinished projects, the Wall Street Journal reported on Monday, citing unidentified people with knowledge of the matter.
Read more: Evergrande Drops 87% in Hong Kong After 17-Month Halt, Loss
Evergrande sits at the center of a years-long property crisis that has hurt the Chinese economy and hammered confidence in the housing market. The company faces an Oct. 30 hearing at a Hong Kong court on a winding-up petition, which could potentially force it into liquidation. Its shares only resumed trading in August after a 17-month halt — dropping 87% upon their return — as the indebted developer unveiled more losses and delayed meetings with creditors.
Evergrande’s shares “should react negatively to the news as the chairman issue will continue to be an overhang,” said Willer Chen, senior research analyst at Forsyth Barr Asia Ltd. “At this stage it’s hard to predict what the outcome will be. It’s a messy situation now.”
“The board is of the view that the operations of the company are normal,” according to a separate filing by its Property Services unit. That language wasn’t included in the China Evergrande Group filing, which advised holders and investors to exercise caution when considering the stock.
If the requests are granted, the shares would resume trading on the Hong Kong bourse on Tuesday.
Read more: Evergrande Halts Trading After Founder Put Under Police Control
--With assistance from John Cheng.
(Updates with analyst comments in sixth paragraph.)
