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Evergrande NEV, whose shares have lost half their value in five years, was banned from trading on the Hong Kong stock exchange for several hours on Monday morning at his request. The company then announced that its boss was being questioned by the authorities. “Liu Yongzhuo was taken into custody in accordance with the law because he is suspected of having committed crimes,” Evergrande NEV said in a press release without further details. When trading resumed in the early afternoon, the stock was down more than 13%.
Electricity to get your head out of the water
Evergrande NEV, suffering from the financial situation of its parent company, announced in March 2023 that it was fighting for its survival and looking for liquidity to stay afloat. The market for electric cars is particularly lucrative in China and many innovative local manufacturers have emerged there in recent years. The Evergrande Group therefore had great ambitions for its automotive subsidiary. Its founder Xu Jiayin wanted to make his group a champion of the electricity industry within 10 years and make the sector his core business, local media reported.
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Evergrande was heavily indebted and had particularly offered its creditors a stake in its ambitious electric vehicle subsidiary in order to stay afloat. The conglomerate, which is now facing liquidation, has been given until the end of January by the Hong Kong courts to submit a restructuring plan.
Its founder, billionaire Xu Jiayin, is under house arrest, according to information published by the Bloomberg agency in September. Evergrande immediately announced that he was “the subject of coercive measures on suspicion of an unlawful crime or misdemeanor,” but without specifying the nature of the facts accused of the founder.
In China, the term “coercive measures” generally refers to a form of deprivation of liberty to ensure that criminal proceedings run smoothly.
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