China’s second-largest property developer and the world’s most indebted property dealer, Evergrande, lost more than a billion dollars on Monday, as investors are seeing a potential collapse of Chinese real estate giant Evergrande in sight that sent shocks to trading markets of US, Asia and Europe.
Evergrande’s share price has fallen since it cautioned about the risk of default last month. The company said senior executives would have to face a “severe punishment” after securing early redemptions on investment products; later then it told retail investors that the company failed to pay on time.
Chairman of Sinic Holdings Group, Zhang Yuanli’s net worth plummeted from $1.3 billion on Monday morning to $250.7 million by the afternoon, according to Forbes. His firm was called to halt trading in Hong Kong following the stock fell 87 per cent.
Zhang was included in Forbes’ Billionaires list of the world’s wealthiest individuals this year. According to Bloomberg, Sinic’s shares experienced a sharp sell-off and a significant spike in trading volume in the hours leading up to its suspension, which comes only weeks before it must pay a 9.5 per cent $246 million bonds due on October 18.
The stock of the company has slumped drastically in 2021. The shares are free-falling, currently trading around 2HKD in bourses in Hong Kong.
Investors and suppliers demanding their money have staged unusual rallies outside the company’s headquarters, with some claiming they are owed as much as $1 million.