Two years after its first default, the world’s most indebted property developer Evergrande faces its biggest legal test so far in its slow-motion collapse, reports the Financial Times. On Monday, a Hong Kong court will address a winding-up petition, brought by offshore investor Top Shine Global, against a company that has embodied the turmoil that has engulfed China’s property sector and whose fortunes have worsened dramatically in recent months.
In September, the authorities said its founder and chair Hui Ka Yan was suspected of crimes, while plans to restructure its international debts were derailed by a lack of approval from the China Securities Regulatory Commission (CSRC). The wider real estate sector has also been shaken this month by a default by the developer Country Garden, adding to dozens of missed payments by its peers.
The prospect of an Evergrande liquidation, with its hundreds of projects across the mainland, gives added urgency to Beijing’s effort to address the problems of the country’s paralysed real estate sector.
