China’s Evergrande Halts Trading as Buildings Reported to Be Under Demolition Order
© AP Photo / Ng Han GuanThe Evergrande Group headquarters at left is seen near other skyscrapers and construction sites in Shenzhen in southern China's Guangdong province, Friday, Sept. 24, 2021.
© AP Photo / Ng Han Guan
MOSCOW (Sputnik) – The heavily-indebted Chinese developer Evergrande said on Monday it has halted trading in its shares amid media reports about the government’s order to the company to tear down several luxury apartment buildings under construction.
“At the request of the Company [Evergrande Group], trading in the shares of the Company was halted at 9:00 a.m. on 3 January 2022 [01:00 GMT] pending the release by the Company of an announcement containing inside information,” the statement of the company read.
While the property giant did not provide a specific reason for the suspension of its shares, Chinese media reported that the government obliged the company with the demolition of 39 buildings with luxury flats under its development in the Ocean Flower project off the coast of the southern island province of Hainan.
The reason behind the order was reportedly the revocation of building permits, believed to have been obtained by the company illegally.
The China Evergrande Group is the second-largest property developer in China. Since July, Evergrande has been on the verge of default after years of growth and active borrowing. Declining sales, a high-risk business model, and Beijing's actions to curb a bubble in the Chinese housing market pushed the company into crisis. In late June, Evergrande's debt was $304 billion.