The arrests targeted employees of its financial subsidiary, Evergrande Wealth Management, Shenzhen police said in a statement quoted by the AFP agency, which did not specify the number of employees nor the charges against them.
However, the note calls on the public to “report” all “cases” of suspected fraud to authorities, without providing further details.
At the end of June, Evergrande had debt of more than 300 billion euros, and the company entered the US with a request for bankruptcy protection.
China’s real estate sector has experienced rapid growth in recent decades, in a country where the purchase of real estate, even before it is built, serves to finance other projects.
But the debts of major groups in the country reached such levels that the authorities decided to put an end to it from 2020.
Since then, access to credit has been significantly reduced for these groups, some of whom are now finding it difficult to complete their projects, fueling a crisis of confidence among potential buyers that is driving down prices.
In recent months, this crisis has spread to another major company in the sector, Country Garden, which was considered financially solid.
In the first half of the year, investment in the sector fell by 7.9%, after shrinking by 10% last year, while real estate sales measured by land area fell by 5.3%, after falling by 24 .3% in 2022.
Beijing has announced several support measures in recent months. State-owned banks opened credit lines to several construction companies, with the main purpose of completing projects whose work had been suspended.
However, authorities extended the duration of the support package until the end of next year and vowed to “adapt and optimize” measures for the sector after recognizing “significant changes” between supply and demand.
China’s central bank also recently announced a reduction in home loan interest rates and the minimum down payment for home purchases, aiming to promote the “stable and healthy development” of the sector.
Source: DN
