China Evergrande chairman under scrutiny on suspicion of illegal crimes

(Reuters) -China Evergrande Group said on Thursday authorities have informed the embattled property developer that its chairman Hui Ka Yan has been subject to mandatory measures in accordance with the law due to suspicion of illegal crimes.

Trading in the company’s shares was suspended earlier in the day after a report that its chairman had been placed under police watch. Evergrande said shares will remain suspended until further notice.

With more than $300 billion in liabilities – roughly the size of Finland’s gross domestic product – Evergrande has become the poster child of a debt crisis in China’s property sector, which contributes to roughly a quarter of the economy.

Evergrande grew rapidly through a land-buying spree backed by loans and by selling apartments quickly at low margins, making Hui Asia’s richest man in 2017, according to Forbes.

But with its overall liabilities ballooning to more than $300 billion, it has come under pressure as the property market weakened and Chinese regulators cracked down on companies with high debt levels.

(Reporting by Upasana Singh in Bengaluru and Sumeet Chatterjee; Editing by Arun Koyyur)