An undisclosed number of employees at the financial subsidiary of Chinese real estate group Evergrande have been arrested by the Shenzhen Police, according to a recent statement. The police report specifically mentions the detention of a man named Du and other alleged criminals from Evergrande Financial Wealth Management. Although details regarding the exact number of detainees, the date of their arrest, or the nature of the crimes they are suspected of were not provided, authorities have requested the public’s assistance in reporting fraud cases.
Evergrande, a heavily indebted conglomerate, recently released its first-half results, which showed a significant year-on-year reduction in its net loss and total liabilities. Shortly after, the company filed for bankruptcy protection in the United States in order to safeguard its assets from creditors while it continues to negotiate debt restructuring.
The financial situation of many Chinese real estate companies has worsened due to government-imposed restrictions on access to bank financing for developers like Evergrande, which had accumulated high levels of debt in the past. However, in recent months, the government has announced supportive measures, and state-owned banks have provided multimillion-dollar credit lines to various developers.