Hui Ka Yan, the billionaire chairman of China Evergrande Group, has been placed under police surveillance, according to a Bloomberg report.
The property mogul was taken away by Chinese police in early September, and is now being monitored at a designated location, Bloomberg reported, citing anonymous sources. The story didn’t say why Hui was under police control, but the action taken by the police, which according to Chinese criminal law isn’t a form of formal detention or arrest, doesn’t necessarily lead to charges being filed.
Still, the embattled billionaire is said to be unable to leave his residence or communicate with others without approval. He must also surrender his passport and identification card to the police. The period of time for being held under surveillance may not last more than six months based on Chinese law.
Evergrande did not respond to repeated requests for comment. This latest turn of events threatens to further upend the company’s restructuring plans. Just last week, Evergrande scrapped a key creditor meeting at the least minute, and said it can’t issue new notes as originally planned because an onshore subsidiary is being investigated for an unspecified matter.
The company, which is holding $327 billion in total debt, is facing the risk of liquidation. The next hearing for a petition to wind up the firm is scheduled for October 30 in Hong Kong, with more creditors saying they will join if the company can’t come up with a viable restructuring plan.
But Evergrande’s legal problems are mounting. In mid-September, police in China’s southern tech hub of Shenzhen detained some employees from Evergrande’s wealth management unit without disclosing any charges. Caixin, a local economic journal, reported on Monday that former Evergrande CEO Xia Haijun and CFO Pan Darong had also been detained by police, as authorities investigate the developer’s use of funds.