China Evergrande Group shares plunged as much as 25% after authorities detained some staff of its money management business, a sign that the saga around the defaulted developer at the heart of China’s property crisis has entered a new phase involving the criminal justice system, reports Bloomberg. The stock slid 9.7% as of 10:03 am in Hong Kong, erasing almost half of a recent jump after China rolled out support for the property sector.
Police in the southern city of Shenzhen said in a statement on Saturday that they had “recently” detained staff, identifying one of the detainees by the last name Du. No charges were disclosed and the statement didn’t say how many people were in custody. Police called on investors to provide leads to the authorities, including filing complaints online.
Evergrande Financial Wealth Management, based in Shenzhen, is a wholly-owned Evergrande unit established in 2015. The firm’s general manager is Du Liang, according to his Linkedin profile. Bloomberg News wasn’t able to verify that he is among the detainees.