Head of China Evergrande Group's electric vehicle arm detained by authorities
Jan. 8 (UPI) -- The vice chairman of Chinese property giant Evergrande and executive director of its electric vehicle division was arrested in China on unspecified charges, the company said Monday in another blow for the embattled group.
New Energy Vehicle's Liu Yongzhuo was detained "in accordance with the law on suspicion of illegal crimes" the company said in a filing to the Stock Exchange of Hong Kong where both companies are listed.
The company announced a four-hour suspension in trading of New EV Group shares to coincide with the announcement which helped minimize any sell-off of the stock which eventually ended the day down 6% at 0.7 cents.
Liu's arrest, following the detention of group founder Hui Ka-yan in September, deals another blow to the group's efforts to restructure around $330 billion in liabilities racked up during a 15-year drive to become one of China's largest businesses.
Liu, 42, who has been with the conglomerate for 20 years, was previously chairman of Evergrande Football Club, Evergrande Spring Water Group and Evergrande High-Tech Group, NEV's 2022 annual report states.
The whereabouts of Hui and whether he has been charged with any offense remain unclear four months after he was placed under "residential surveillance" by Chinese authorities along with other current and former executives.
Residential surveillance is a form of detention where suspects, most frequently dissidents, are held at undisclosed locations, incommunicado, and denied access to their families or legal counsel.
In December, Evergrande Group won an eight-week stay from likely bankruptcy after a Hong Kong court gave it more time to pitch newly revised debt restructuring proposals with creditors.
The winding-up petition filed by creditor Top Shine, over Evergrande's failure to honor a $110 million buyback agreement for shares Top Shine bought in its Fangchebao subsidiary, is due back in court Jan. 29.
Time is running out for Evergrande, which first defaulted in 2021, with the Hong Kong judge saying she was on the verge of granting the winding-up order.
The petition would put receivers in control of paying off creditors by liquidating the assets of Evergrande which, according to its most recent accounts in June, has just $1.87 billion in the bank.
Much of its debt is owed to homebuyers with down payments on apartments and houses that are half-built, or on which work has yet to start, as it battles to finish more than 1,000 developments across the country with suppliers also highly exposed.
In August, Evergrande filed for U.S. bankruptcy protection in a court in New York, seeking recognition of restructuring talks being pursued in Hong Kong, the Cayman Islands and the British Virgin Islands.
In July, the group reported after losing a combined $81.1 billion in 2021 and 2022, most of it from payments to suppliers and lenders.
