In the latest turn of events, China Evergrande New Energy Vehicle Group Ltd, the electric vehicle (EV) unit of China Evergrande Group (OTC:EGRNF), experienced a significant 23% fall in share value on Monday following the arrest of its executive director.
What Happened: Hong Kong-listed shares of China Evergrande’s EV division plummeted sharply on Monday. The dip came in the wake of the company revealing that executive director Mr. Liu Yongzhuo had been apprehended on suspicion of illegitimate activities.
“The company has learned that its executive director Mr. Liu Yongzhuo has been detained in accordance with the law on suspicion of illegal crimes,” Evergrande NEV announced in a filing to the Hong Kong exchange, reported CNBC.
The company has yet to disclose further information regarding the allegations or the precise timing of Mr. Yongzhuo’s detainment.
See Also:Â Donald Trump Suggests Supreme Court Justices He Appointed Could ‘Go Out Of Their Way’ To Hurt Him
Trading of the company’s shares was suspended before the market opening in Hong Kong on Monday, resuming at 1 p.m. local time. This incident comes on the heels of a significant 18% drop in Evergrande NEV shares last week after the termination of a planned share sale to U.S.-listed NWTN Inc (NASDAQ:NWTN).
Why It Matters: Evergrande’s financial woes have been ongoing, with Moody’s downgrading China’s debt outlook in December 2023. The company’s substantial debt, pegged at $300 billion, led to its chairman Hui Ka Yan‘s fortune plummeting by 93% by the start of 2023.
In August of the same year, Evergrande filed for Chapter 15 bankruptcy protection in the United States due to its severe debt crisis. Later that month, the company suffered another blow when its shares plunged by 87% as trading resumed after a 17-month hiatus. This significant fall in shares was in line with Evergrande’s substantial loss of 39.25 billion yuan ($5.38 billion) in six months ending June 2023.
Read Next:Â Tuna Sells For Record-Breaking $789K In Tokyo, Buyer Says, ‘I’d Been Feeling That The Economy Was Getting Better’
Image Via Shutterstock
Engineered by
Benzinga Neuro, Edited by
Kaustubh Bagalkote
The GPT-4-based Benzinga Neuro content generation system exploits the
extensive Benzinga Ecosystem, including native data, APIs, and more to
create comprehensive and timely stories for you.
Learn more.
