Evergrande firms halt trading amid 'mandatory measures' on chairman

Staff reporter and Bloomberg

China Evergrande has received notification from authorities that its chairman Hui Ka-yan has been subject to "mandatory measures" in accordance with the law due to suspicion of illegal crimes, the company said in a filing yesterday.

Evergrande, its property service arm Evergrande Property Services as well as electric vehicle unit Evergrande New Energy Vehicle suspended trading in Hong Kong yesterday.

Evergrande said trading of shares will remain suspended until further notice, according to a regulatory filing with the Hong Kong stock exchange.

Hui was reportedly taken away earlier this month and is being monitored at a location. Mainland online media outlet Guancha.cn also reported that Hui was under surveillance in Beijing.

It is not clear why Hui is under residential surveillance, which falls short of formal detention and it does not mean Hui will be charged with a crime either.

The move is the latest sign that the indebted developer has entered a new phase involving the criminal justice system, after authorities detained some staff at its wealth management unit and two former executives, according to Caixin.

It begs the question of the fate of Evergrande after setbacks to its restructuring plan roiled financial markets and raised the risk of liquidation.