The founder of Hengda Group, the epicenter of China’s real estate crisis, is said to be under house arrest.
China’s local financial difficulties, which have been dependent on real estate development, are emerging as another time bomb.
This is Beijing correspondent Kang Jeong-gyu.
Chairman Xu Jain, founder of Hengda Group, has become a symbol of downfall in China’s real estate development legend.
Earlier this month, there were reports that he was taken into custody by public security and is being monitored at a designated location.
Chinese criminal law terminology ‘residential surveillance’, a form similar to house arrest rather than formal arrest or detention.
[왕원빈 / 중국 외교부 대변인 : (헝다 쉬자인 회장이 구금 상태라는데 이유가 뭔가요?) 당신이 언급한 상황을 이해하지 못합니다.]
Prior to Chairman Xu, other current and former executives and employees of Hengda were also detained by the authorities.
Chinese media reported that they were arrested for illegal financial activities.
Recently, Hengda announced that it had not been able to repay the principal and interest of regional bonds worth 700 billion won.
On the 25th, the meeting to adjust offshore bonds was suddenly postponed, causing stock prices to plummet by more than 25%.
There is an assessment that the bankruptcy, which has been going on for over two years, has entered the countdown.
[‘헝다 사태’ 피해자 (지난 2021년) : 돈을 돌려달라! 돌려달라! 내 돈을 돌려주지 않으면 뛰어내려 버릴 거야!]
Local finances, which have been dependent on real estate development, are busy borrowing to repay debt.
As of August this year, bonds issued by local governments amounted to approximately 1,200 trillion won, the largest amount ever recorded.
This is YTN Kang Jeong-gyu from Beijing.
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