Staff at Evergrande wealth unit held by Chinese police

Staff members of Evergrande's wealth management unit have been detained by police in Shenzhen, China. The police posted on social media, urging the public to report any suspicious fraud cases. This comes as a newly created state-owned insurer announced its takeover of Evergrande's insurance arm on Friday. Evergrande, a property developer, has been at the center of a crisis that has engulfed China's real estate industry since 2021. The Shenzhen Nanshan District Police Bureau stated that they have taken "criminal compulsory measures" against Du and other suspects at Evergrande Financial Wealth Management Co. However, no further information has been provided regarding the number of detentions, the identities, or the charges they may face. The police mentioned that the case is still under investigation and investors can file complaints with the authorities. Evergrande Financial Wealth Management Co. is a wholly-owned subsidiary of Evergrande, established in 2015 and based in Shenzhen. Although it remains unconfirmed if Du Liang, the General Manager of Evergrande Financial Wealth Management, is among those detained, the BBC was unable to verify this information. The BBC reached out to Evergrande for comment but received no immediate response. Meanwhile, China's National Administration of Financial Regulation announced a plan on Friday for the state-owned Haigang Life Insurance Co. Ltd to assume the assets and liabilities of Evergrande Life Assurance. Evergrande shares experienced a 3% drop on Monday during midday trading, following a recovery from an initial 25% loss. Beijing has been implementing stricter regulations to limit property developers' access to credit since 2020. Once one of China's largest companies, Evergrande's debt has exceeded $300 billion as it underwent rapid expansion. The company is currently attempting to restructure its operations after defaulting on debts and suffering significant losses. Other prominent Chinese property developers, such as Country Garden and Sino-Ocean, have also been struggling to meet their debt repayment obligations. China's real estate industry is a crucial component of the world's second-largest economy. Some experts express concerns that the crisis in the sector could destabilize the economy and have a global financial market impact. Additionally, Beijing has been cracking down on alleged financial sector corruption for over two years, resulting in severe penalties, including the death penalty for top executives.