In a further blow to the already embattled China Evergrande Group, the electric vehicle subsidiary, Evergrande New Energy Vehicle Group, announced on Monday that its vice chair and executive director, Liu Yongzhuo, has been detained on suspicion of “illegal crimes.” The company did not provide specific details about the nature of the alleged offenses.
Trading of Evergrande New Energy Vehicle Group shares was temporarily suspended in the morning session, pending an official statement from the company. Following the announcement, the shares are expected to resume trading at 1 p.m. local time (0500 GMT).
This development comes at a challenging time for Evergrande New Energy Vehicle Group, which saw its stock plummet by 18.6 percent in the first week of 2024. The decline followed the company’s announcement the previous Monday that its plans to sell shares to U.S.-listed NWTN had been scrapped. The reasons for abandoning the share sale were not detailed in the statement, contributing to uncertainty and market concerns.
The wider Evergrande Group, led by chairperson and founder Hui Ka Yan, has been grappling with significant financial challenges, standing as the most indebted property developer globally. The parent company has been under intense scrutiny, with Hui Ka Yan himself being under investigation for suspected crimes, according to a filing made in late September.
The situation surrounding Evergrande New Energy Vehicle Group adds to the complexity of issues facing the Evergrande conglomerate, raising questions about the future of its various subsidiaries and the broader implications for China’s electric vehicle industry.
As the company continues to navigate a tumultuous period, investors and industry observers are closely monitoring developments to gauge the impact on Evergrande’s financial stability and the electric vehicle market in China.
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