© Reuters. FILE PHOTO: Hui Ka Yan, chairman of Evergrande Real Estate Group Ltd, the country’s second-largest property developer by sales, attends a news conference on annual results in Hong Kong, China March 29, 2016. REUTERS/Bobby Yip/File photo
(Reuters) – China Evergrande (HK:) Group Chairman Hui Ka Yan is being investigated on suspicion of transferring assets offshore while the indebted property developer struggles to complete unfinished projects, the Wall Street Journal reported on Monday.
Evergrande has been working to get creditors’ approval to restructure its offshore debt but the process grew more complicated last week when the company said it could not issue new debt due to an investigation into its main China unit.
Adding to the embattled developer’s woes, it said on Friday that its chairman was under police watch and was suspected of committing unspecified crimes.
Reuters reported last week that a group of offshore creditors was planning to join a court petition to liquidate the developer if it did not submit a new debt restructuring plan by the end of October.
Evergrande did not immediately respond to a Reuters request for comment during week-long National Day holidays.
With more than $300 billion in liabilities, Evergrande has become the poster child of a debt crisis in China’s property sector, which contributes to roughly a quarter of the economy.
Trading in the shares of Evergrande and two of its units was suspended on Thursday after media reported that Hui had been taken away by police and was being monitored at a designated location.