China: the boss of Evergrande’s auto subsidiary “in detention”

The boss of the automobile branch of Evergrande, a Chinese real estate group whose astronomical debt regularly makes the headlines, is “in detention”, the company announced on Monday, which suspended its stock market listing.

“Liu Yongzhuo has been detained in accordance with the law because he is suspected of having committed offenses,” Evergrande NEV said without further details in a press release to the Hong Kong Stock Exchange.

The company, which suspended its stock market listing on Monday morning at his request, announced its return in the afternoon.

When it was created in 2019, Evergrande NEV gave itself “three to five years” to become the “most powerful” manufacturer in the world in the field of electric cars.

But the financial setbacks of its parent company, the Evergrande real estate group, have seriously damaged its projects and its cash flow.

Evergrande NEV had indicated in March 2023 that it was fighting for its survival and seeking liquidity to stay afloat.

The subsidiary, whose shares have lost half of their value in five years, is valued at around 520 million euros.

The Evergrande conglomerate, former number one in real estate in China and present in a multitude of sectors, is strangled by debt estimated in June 2023 at some 328 billion dollars (300 billion euros today).

Its founder, billionaire Xu Jiayin, is under house arrest, according to information published in September by the Bloomberg agency.

Evergrande immediately indicated that its boss was “the subject of coercive measures due to suspicion of a crime or offense in violation of the law”.

But the group did not specify the nature of the acts alleged against its founder.

The term “coercive measures” generally refers in China to a form of deprivation of liberty in order to guarantee the smooth running of criminal proceedings.

© 2024 AFP

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