Evergrande’s shares tumbled to a three-week low on Wednesday after Bloomberg reported that the company’s chairman Hui Ka Yan is being held under police surveillance. Hui was detained earlier in the month, along with other Evergrande executives and staff.

No Indications that Hue is Charged

Shares of the Chiana Evergrande Group took yet another beating Wednesday after reports revealed that police are holding the company’s chairman. According to Bloomberg, Hui Ka Yan has been placed under police control after being arrested earlier this month.

“Hui was taken away by Chinese police earlier this month and is being monitored at a designated location, the people said, asking not to be identified because the matter is private.”

– Bloomberg wrote in the report.

For the time being, it remains unknown why Hui is being held. That said, there are no indications that the billionaire chairman has been officially charged with a crime.

However, Hui is not allowed to leave the location, meet, or talk with other people without approval, under the rules of China’s Criminal Procedure Law. This rule also states that the detainee’s passport and ID card must be handed to the police, although the process should not last more than six months.

Fears Emerge That Property Crisis Can Spread to Other Sectors

From a broader perspective, the news marks the latest blow to the Evergrande Group, the second-largest property developer in China by sales.

The absence of the company’s chairman has now further clouded Evergrande’s restructuring plan designed to help it stay afloat as the property crisis in China deepens. Meanwhile, the company’s shares plummeted by an additional 19%, printing a fresh 3-week low of 0.32 HKD ($0.04).

The stock market slump comes just a day after Evergrande’s shares crashed by 21% after the company canceled key creditor meetings. On the same day, China’s property stocks witnessed the sharpest drop in 2023, putting additional pressure on the world’s second-biggest economy. The Chinese authorities have adopted several measures to shore up the local equity market, such as cutting the stamp duty on stocks, although these steps have made little impact so far.

Meanwhile, the deteriorating property crunch led to fresh risks. Specifically, the worsening investor sentiment caused fears that the ongoing turmoil could spread into other sectors, most notably commodities.

This article originally appeared on The Tokenist

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