HONG KONG (Reuters) -Shares of China Evergrande jumped as much as 42% in volatile trade on Tuesday, days after the embattled developer said its billionaire founder was being investigated over unspecified crimes.
Evergrande’s stock was suspended last Thursday after a report that its chairman and founder had been placed under police surveillance. The world’s most indebted developer later said in a statement that Hui was being investigated.
“There is currently no other inside information in relation to the company that needs to be disclosed,” Evergrande said in a statement late on Monday.
The stock was last trading up 33% at HK$0.42, having lost around three-quarters of its value since August.
The once top-selling Chinese developer has been embroiled in a debt crisis that reached a turning point when it defaulted on its offshore debt obligations in late 2021, sending jitters through global markets amid fears of contagion.
The crisis deepened last week when it said its main unit in China was unable to issue new debt due to an ongoing investigation, further complicating the developer’s restructuring plan.
The clock is ticking for Evergrande to get creditors’ approval for restructuring its offshore debt.
Reuters reported last Tuesday that a major Evergrande offshore creditor group was planning to join a liquidation court petition filed against the developer if it does not submit a new debt revamp plan by the end of October.
With the latest setbacks, some analysts say the debt restructuring plan now looks set to falter and that the risks of the company being liquidated are increasing.
The developer is scheduled to have a hearing on a winding up petition on October 30.
(Reporting By Donny Kwok; Writing by Anne Marie Roantree; Editing by Muralikumar Anantharaman and Lincoln Feast.)