Hui Ka-yan placed under detention in Shenzhen

Agencies and staff reporter

Hui Ka-yan, the chairman of China Evergrande (3333) - the company at the centre of the country's property sector crisis - has been moved to a special detention centre in Shenzhen, two sources with knowledge of the matter said.

Hui, 65, has not been seen in public since he was taken away by Chinese authorities a year ago and his current whereabouts have not been previously reported.

After China's securities regulator found Evergrande's flagship unit had inflated earnings and committed securities fraud, Hui was fined 47 million yuan (HK$51.5 million) in March and barred from the securities market for life. Evergrande was ordered into liquidation in January.

Hui, who was once China's richest man, is not known to have been formally charged with any crimes and it is unclear how long he will remain in detention or whether he will be tried or set free.

The property tycoon was initially under house surveillance in Beijing after his arrest, according to one of the sources.

He was transferred to Shenzhen a few months ago to allow him to more easily communicate with top Evergrande executives, said the second source. Evergrande is headquartered in the neighboring southern city of Guangzhou and its wealth management unit is based in Shenzhen.

Hui founded Evergrande in 1996, transforming it into China's biggest property developer in terms of contracted sales, aggressively taking on debt. Since 2021, the company has defaulted on most of its US$300 billion (HK$2.34 trillion) liabilities as well as billions of dollars of wealth management product payments, and its troubles have been emblematic of China's property sector woes that have long dragged on growth.

In January, a Hong Kong court ordered the liquidation of Evergrande after noting the developer had been unable to offer a concrete restructuring plan more than two years after defaulting on its offshore debt and following several court hearings. The complicated liquidation work is still ongoing.

Meanwhile, China is poised to cut interest rates on more than US$5 trillion of outstanding mortgages as early as this month, as it accelerates a move to reduce the borrowing costs for millions of families to spur consumption.