The huge Chinese Evergrande group, the most indebted real estate development company in the world, resumed its operations on the stock exchange on Tuesday, after having suspended trading last week following authorities’ investigations into its founder, Hui Ka Yan , who had been arrested by the police on suspicion of unspecified crimes. When trading resumed, Evergrande shares gained over 60 percent on the Hong Kong stock exchange, before falling to around 10 percent during the day.
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Evergrande has been at the center of a construction crisis for several years that has damaged the entire Chinese economy. In August it asked a New York court for access to a US bankruptcy law similar to Italy’s extraordinary administration to try to avoid liquidation, but it recently had to review its management plans for both the debt in China and for that with foreign creditors. A hearing is scheduled for October 30 in a Hong Kong court which could still force it into liquidation.
