Employees of embattled real estate developer Evergrande’s investment division have been arrested by authorities in Shenzhen, a city in southern China. The police asked people to tell them if they see any crimes or fraud.
On Friday, it was announced that a newly formed government-owned insurance company has taken over the firm’s insurance division.
Evergrande is in the middle of a big problem that has affected China’s real estate business since 2021.
A while ago, the police arrested Du and other suspected criminals from Evergrande Financial Wealth Management Co, according to the Shenzhen Nanshan District Police Bureau.
They did not provide more information about the number of people who were arrested, their names – except for one person called Du – or what crimes they might be accused of.
The police are still investigating the case and if you are an investor, you can report any complaints to the authorities.
Evergrande Financial Wealth Management Co is a company that manages people’s money and helps them grow their wealth. This company is owned entirely by Evergrande. It was created in 2015 and is located in Shenzhen.
Du Liang is the boss of Evergrande Financial Wealth Management, as stated on his Linkedin page. The BBC could not confirm if he was one of the people arrested by the police.
China’s National Administration of Financial Regulation (NAFR) has a plan to transfer Evergrande Life Assurance’s assets and liabilities to Haigang Life Insurance Co. , which is owned by the government. An abbreviation for “Limited,” which means a company or business entity.
Shares of Evergrande were not moving much on Monday afternoon after bouncing back from a 25% drop earlier in the day.
Since 2020, it has become harder for property developers in Beijing to borrow money.
Evergrande used to be one of China’s largest companies, but it borrowed more than $300 billion as it grew quickly.
The company is trying to change its business plan because it didn’t pay its debts and lost a lot of money.
Other big Chinese real estate companies, such as Country Garden and Sino-Ocean, have been having difficulty paying back their debts.
China’s real estate industry is an important part of the second biggest economy in the world.
Some experts are worried that the problem in the industry could harm the economy and affect the global financial markets.
Beijing has been working on stopping corruption in the financial sector of the country for over two years.
High-ranking officials have been given very harsh punishments, such as the death penalty.