When Evergrande’s mainland unit misses a loan payment, the company’s stock falls.

It said on Monday that its Chinese unit, Hengda Real Estate, had not paid back 4 billion yuan (£449m; $547m) of debt.

Caixin, a newspaper based in Beijing, also said that the government has detained several current and past Evergrande executives.

Caixin said that some of the people who were held were the former CEO Xia Haijun and the former finance boss Pan Darong.

The BBC hasn’t been able to confirm Caixin’s story on its own. When the BBC asked Evergrande for a response, the company did not answer right away.

Tuesday’s drop in its share price came after Monday’s drop, which was even bigger. This week, Evergrande’s price has dropped by more than 25%.

Evergrande told the Hong Kong Stock Exchange on Sunday that it couldn’t sell new debt as part of its plan to restructure because the government was looking into Hengda.

At the beginning of this month, police in Shenzhen, which is in southern China, arrested members of Evergrande’s wealth management team.

In a post on social media, cops asked people to report any cases of fraud they thought might be going on.

A week before that, the government said that Evergrande’s insurance business would be taken over by a new state-owned insurance company.

Is the Chinese economy a ‘ticking time bomb’?
Eveline Danubrata from REDD Intelligence Asia told the BBC that the latest news will probably make it harder for Evergrande to complete its restructuring.

Evergrande also has a court case in Hong Kong about a petition to wind up the company, which could force it to go out of business. The meeting, which had been set for July, will now happen on October 30.

 

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