BEIJING, October 2 (TMTPost)— Embattled property developer China Evergrande Group announced it will soon resume shares trading after it disclosed chairman’s being under police surveillance.

Credit：Visual China

Evergrande announced it has applied for resumption of shares trading from 9:00 a.m., October 3, Beijing Time, according to a filing with the Hong Kong Stock Exchange (HKEX) late Monday. The board of directors believes the company operates normally and there is no other inside information about the company that need to be disclosed, the filling said.The subsidiary Evergrande Property Services has submitted the same application for shares trading to the exchange, a separate filling that day showed.

These fillings suggested Hong Kong-listed shares’ trading of both Evergrande and its unit same unit will be allowed to end suspection. But China Evergrande New Energy Vehicle Group, another Evergrande’ unit that was halted trading last Thursday, hasn’t disclosed similar updates about its shares yet.

The latest disclosure came days after Evergrande suggested its founder and chairman Hui Ka Yan may be charged for the company’s debt crisis. China Evergrande Group along with its new energy vehicle unit and property services unit were suspended from trading in Hong Kong on last Thusday, signaling crisis of the company is worsening. Late that day Evergrade said Hui Ka Yan has been subject to “mandatory measures” under the law “due to suspicion of illegal crimes”.

Hui was taken away along with his younger son Peter Xu, who used to lead Evergrande’s wealth unit, Chinese business and financial media outlet Yicai cited an insider. Prior to Hui and his son, a number of former Evergrande executives were said to be detained.  The first executive to be taken away was Ke Peng, the former executive president of Evergrande Group, who was nabbed by the police for investigation in January in connection with his involvement in Evergrande's Shenzhen’s shanty town revamping. On September 16, Du Liang, the general manager of Evergrande Wealth Management, Evergrande's financial subsidiary, and other individuals suspected of crimes were taken into custody by the Shenzhen police. A week ago, Zhu Jialin, the former Chairman of Evergrande Life Assurance, was reported to be under investigation. Pan Darong, former chief financial officer who resigned in July, 2022, was said earlier this week to have been detained by Chinese authorities.

Hui’s being under “mandatory measures” is sort of different with the reported residential surveillance, and he is very likely to be committing multiple crimes, which means it could take quite a lot of time to decide, Chinese newspaper 21st Century Business Herald cited a criminal law expert.

Evergrande, the world's most indebted property developer, first declared a default on its debt in late 2021 when the second largest property developer in China had a total of more than US$300 billion in liabilities. Financial reports disclosed in April showed the company’s debt load reached RMB2.44 trillion as of December 31, 2022, reducing RMB140 billion from late 2021. The insolvency gap increased from RMB 473.1 billion to RMB599.1 during the year 2022.

Evergrande surprisingly disclosed more than a week earlier that it won’t hold meetings about proposed debt restructuring on September 25 and 26, citing worse-than-expected sales since it announced the meeting schedule in March. While not elaborating creditors’ demand, the company said it would make public statement if there were any change about terms of restructuring proposal. Days after announcing dropping the restructuring meeting plan, Evergrande said it is currently unqualified for issuance of new notes as its subsidiary Evergrande Real Estate Group Limited is under investigation by the China Securities Regulatory Commission (CSRC), China’s top securities regulator.