HONG KONG, Sept 12 (Askume) – China Evergrande Group(3333.HK) , is at the center of China’s real estate crisis, two sources said
Mr Xu, 65, has not been seen in public since he was taken away by Chinese authorities a year ago, and there has been no prior information about his current whereabouts.
In March, Mr. Xu was fined $6.6 million and banned from the securities market for life after China’s securities regulator found that Evergrande Group’s flagship business had inflated earnings and committed securities fraud.Evergrande was ordered to enter liquidation proceedings in January .
It is unclear whether Xu Zhengxiong, once China’s richest man, has been formally charged with any crime, how long he will be detained, or whether he will be prosecuted or released.
Chinese authorities have detained many former high-flying business executives, some for years, with little or no information about their fate.
According to sources, the real estate tycoon was initially placed under residential surveillance in Beijing following his arrest.
A second source said he was transferred to Shenzhen a few months ago to communicate more easily with top Evergrande executives. Evergrande Group is headquartered in the nearby southern city of Guangzhou, and its wealth management arm is in Shenzhen.
The sources declined to be named because of the sensitivity of the matter.
China’s Ministry of Public Security and the Shenzhen Municipal Government did not respond to Askume requests for comment, nor did its main subsidiary Evergrande Real Estate. Evergrande’s Hong Kong court-appointed liquidator declined to comment.
In 1996, Mr. Xu founded Evergrande Group, turning it into China’s biggest real estate developer by contracting sales and actively taking on debt.
The company has defaulted on most of its $300 billion in liabilities and billions of dollars in wealth management product payments since 2021, and its problems have become emblematic of the problems facing China’s real estate industry, which has long been a drag on economic growth.
In March this year, an investigation by the supervisory authority found that a subsidiary of Evergrande Group inflated revenue by 564 billion yuan ($79 billion) from 2019 to 2020 and issued bonds based on false statements.
Money management payments
According to another source, Xu is in “good health” and has access to medical care and good food at the special detention center. Detainees in special detention centers are generally treated better than those in regular detention centers.
The source said Mr Xu wrote to Evergrande executives after being referred to the centre, urging them to quickly resolve the issue of financial products not offering returns to investors.
Evergrande’s wealth management unit announced plans to provide returns to investors in its wealth management products by the end of 2021. But last August, the company said it could no longer make the monthly payments. Weeks later, some of the unit’s employees were detained by Shenzhen police.
Two sources also said Evergrande was close to handing over most of the promised homes to buyers, adding that construction on the apartments was more than 70% complete.
He did not give details on how many apartments that could mean. As of 2022, Evergrande has about 800 projects across the country.
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