China Evergrande, which experienced a significant surge in the morning, plummeted by 15% in the afternoon. What caused this sharp decline?
Hong Kong stocks of the "Evergrande Group" have all experienced double-digit declines, as there are rumors circulating that Xu Jiayin is under police surveillance at his residence, and several former senior executives of Evergrande have been taken away this month. All these signs indicate that Evergrande may have entered a new stage involving criminal judicial investigations.
At the end of summer, Hong Kong stocks, which had finally shown some signs of improvement, experienced a significant plunge in the afternoon today, particularly in the "Evergrande Group".
On Wednesday, September 27th, the "Evergrande Group" continued to decline in the Hong Kong stock market, with China Evergrande falling more than 16% at one point. Previously, it had risen nearly 14%, but now it is down by about 15%. Evergrande Auto fell more than 21%, and Evergrande Property fell 15%.
Why did Evergrande experience such a "free fall"? What happened? It is mainly related to the Chairman of Evergrande, Xu Jiayin!
According to Bloomberg, Xu Jiayin was taken away by the Chinese police earlier this month and is currently under surveillance at a designated location. The reason is still unknown.
Bloomberg stated that in China, this action by the police does not constitute a formal arrest, nor does it mean that Xu Jiayin will be prosecuted.
According to China's "Criminal Procedure Law," being under surveillance means that without approval, Xu Jiayin cannot leave his residence, meet with others, or communicate with others. His passport and ID must be handed over to the executing authority for safekeeping. Surveillance can last for a maximum of 6 months.
It is worth noting that in recent days, there have been continuous reports in the media that Zhu Jialin, former Chairman of Evergrande Life Insurance, Xia Haijun, former Executive Director of Evergrande, and Pan Darong, former Chief Financial Officer, have also been taken away for investigation.
Analysts believe that all these signs indicate that Evergrande may have entered a new stage involving a criminal investigation.
Clearly, the news of Xu Jiayin and others being taken away is another blow to Evergrande's current situation.
Just yesterday, Evergrande's Hong Kong stocks plummeted due to an announcement by its subsidiary, Evergrande Real Estate, that it was unable to repay the principal and interest of 4 billion yuan in bonds due on Monday.
As a result, the ongoing crisis at Evergrande continues to impact investor sentiment, further clouding the already pessimistic real estate market.