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The billionaire chair and founder of China’s 🇨🇳 Evergrande Group is being investigated and under police surveillance over suspected “illegal crimes,”. Trading of Evergrande shares were halted on the Hong Kong 🇭🇰 Stock Exchange today, 26th Sept., amid mounting concern over the company’s plan to restructure and fend off the looming specter of liquidation. Last week, police detained staff of Evergrande’s wealth management unit after the co. failed to repay investors. It marks another low for the firm which was declared to be in default in 2021 after missing a crucial repayment deadline, triggering China’s current real estate market crisis. With more than $300 billion in liabilities - roughly the size of Finland’s GDP- Evergrande is the face of a debt crisis in China’s property sector. In 2020, Beijing 🇨🇳 brought in new rules to control the amount owed by big real estate developers. The new measures led Evergrande to offer its properties at major discounts to ensure money was coming in to keep the business afloat. Now it is struggling to meet the interest payments on its debts. This uncertainty has seen Evergrande’s shares lose more than 99% of their value in the past three years. There are several reasons why Evergrande’s problems are serious. Many people bought property from Evergrande even before building work began. They have paid deposits and could potentially lose that money if it goes bust. Firms doing business with Evergrande, including construction and design firms and materials suppliers are at risk of incurring major losses, which could force them into bankruptcy. If Evergrande defaults, banks and other lenders may be forced to lend less, which can lead to a credit crunch. Video source - Reuters Источник: The Paradigm Shift Channel ⏳
