Evergrande chairperson under scrutiny for offshore asset transfers
China Evergrande Group's chairperson, Hui Ka Yan, is in hot water as he's being investigated for possibly moving assets offshore. This comes at a time when the debt-ridden property developer is trying to finish projects and restructure its offshore debt, according to the Wall Street Journal. With over $300 billion in liabilities, Evergrande has become the poster child for China's property sector debt crisis. The investigation into Yan's actions only adds more fuel to the fire.
Hui Ka Yan placed under police watch
Things aren't looking great for Yan, as he's not only under investigation but also under police surveillance for suspected crimes. Just last week, it was reported that some offshore creditors were ready to take legal action if Evergrande didn't come up with a new debt restructuring plan by the end of October. Trading in shares of Evergrande and two of its units was put on hold after reports surfaced that Yan had been taken away by police.
Impact on China's property sector and economy
Evergrande's financial woes are a big deal for China's property sector, which makes up about a quarter of the country's economy. The company's massive $300 billion in liabilities has turned it into a symbol of the debt crisis in this sector. The ongoing investigation into Yan's potential offshore asset transfers only makes things worse, raising concerns about the future stability of China's property market and its overall economic health.
Potential government intervention and future outlook
As Evergrande continues to face financial hurdles, some experts think that the government might need to step in to stabilize the property sector, similar to what the US did during the 2008 financial crisis. George Magnus, a former chief economist at UBS and an associate at Oxford University's China Center, told WSJ, "The government should take more decisive steps to clean up the troubled property sector, allowing losses to be allocated among developers, banks, and other stakeholders."
