Evergrande shares plunge following Citron report

Property developer China Evergrande (0333.HKG) said it was considering legal action against Citron Research after the short-seller group accused Evergrande of financial irregularity and bribery, Reuters reported. Evergrande’s shares fell more than 4% and its bonds dropped 1.3 basis points on Friday, following a 11.4% fall in the company’s stock on Thursday that wiped out about US$1 billion of the firm’s market capitalization. Evergrande Chairman Hui Ka Yan, who owns 63% of the company, denied allegations that it was insolvent in a conference call on Thursday, saying the company has RMB13 billion (US$2 billion) of cash on hand, sufficient to cover its operations. In a note on Friday, Barclays Capital said there was “still no clarity on whether the accusations are true or false.”