The head of heavily indebted Chinese property developer Evergrande‘s electric vehicle arm has been detained by authorities, the firm said Monday.
“The Company has learned that its executive director Mr. Liu Yongzhuo has been detained in accordance with the law on suspicion of illegal crimes,” Evergrande NEV said in a filing on the Hong Kong stock exchange.
Once China’s biggest real estate developer, Evergrande has reported more than $300 billion in liabilities and its troubles have become a symbol of the nation’s years-long property crisis.
News of Liu’s detention followed Evergrande’s announcement in September that the firm’s chairman, Xu Jiayin, was “subject to mandatory measures” from Chinese authorities over “crimes”.
At the time of its establishment in 2019, Evergrande NEV said it aimed to become the leading manufacturer of electric cars in just “three to five years”.
But as its parent company grappled with an increasingly dire financial situation, the EV unit‘s cash flow and growth outlook were heavily impacted.
Evergrande NEV indicated in March 2023 that it was fighting to secure liquidity in order to stay afloat.
On Monday, shares in the firm were halted on the Hong Kong Stock Exchange “at the request of the Company”, said the firm in a statement.
But the firm then applied to the HKEX to resume trading at 1:00 pm (0500 GMT) Monday, the later announcement showed.
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