Chinese Property Giant Evergrande Chairman Placed Under Police Surveillance; Risk of Liquidation Looming

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The Chairman of Chinese property giant Evergrande Hui Ka Yan has reportedly been placed under residential surveillance, which falls short of formal detention or arrest, according to Bloomberg.  It is unknown why Hui has been placed under surveillance and it comes after staff from Evergrande’s wealth management unit was formally detained earlier this month.  The news worsens the bleak outlook for the company after Evergrande cancelled creditor meetings last week aimed at avoiding default on its more than $300 billion in liabilities.  Some of the creditors have now said that they will join a liquidation petition if Evergrande doesn’t have a debt restructure plan in place by the end of October.  The fallout of an Evergrande collapse wound be significant as the property sector comprises about one-fourth of China’s economy and could drag down other at-risk companies like Country Garden, which is expected to miss a $40 million debt payment this week.