---
title: "Chinese police detain staff of Evergrande wealth unit"
description: "Authorities detained some staff of the money management business of China Evergrande Group, a sign that the saga around the defaulted developer at the heart of the nation’s property crisis has entered a new phase involving the criminal justice system."
type: "NewsArticle"
publisher: "Daily Maverick"
site: "https://www.dailymaverick.co.za"
section: "Business Maverick"
author: "Bloomberg"
author_url: "https://www.dailymaverick.co.za/author/bloomberg/"
canonical_url: "https://www.dailymaverick.co.za/article/2023-09-18-chinese-police-detain-staff-of-evergrande-wealth-unit/"
published: "2023-09-18T05:53:26"
lang: "en-ZA"
word_count: 390
---

# Chinese police detain staff of Evergrande wealth unit

> Authorities detained some staff of the money management business of China Evergrande Group, a sign that the saga around the defaulted developer at the heart of the nation’s property crisis has entered a new phase involving the criminal justice system.

By Bloomberg · Published 18 September 2023, 07:53 SAST

## Key points
- Daily Maverick's take on China Evergrande's woes: As Beijing cracks down on alleged corruption in the finance industry, China Evergrande's shares plunge and staff are detained, while its debt-laden developer offloads assets and restructures amidst a national outcry.
- Shares of China Evergrande dropped 25% before reversing, bringing 2021 losses to 61%.
- Police detained staff at the Shenzhen-based company, including one with the last name Du.
- Beijing has launched a campaign against illegal fundraising and is cracking down on alleged corruption in China’s finance industry.
- The government has set up a joint venture to take over China Evergrande's insurance arm.

## Content

The company’s shares plunged as much as 25% as trading opened in Hong Kong, and then reversed. The stock was up 3% as of 11.20am, paring this year’s decline to 61%.

Police in the southern city of Shenzhen said in a [statement](https://mp.weixin.qq.com/s/swuX3v6ZTCfDYuZnXFyhqw) on Saturday that they had “recently” detained staff, identifying one of the detainees by the last name Du. No charges were disclosed and the statement didn’t say how many people were in custody. Police called on investors to provide leads to the authorities, including filing complaints online.

Evergrande Financial Wealth Management Co., based in Shenzhen, is a wholly-owned Evergrande unit established in 2015. The firm’s general manager is Du Liang, according to his Linkedin profile. Bloomberg News wasn’t able to verify that he is among the detainees.

Evergrande sits at the centre of a credit crisis that has rippled through China’s property sector and curtailed growth in the world’s second-largest economy. The debt-laden developer has offloaded a range of assets, including trophy land parcels and stakes in other financial institutions.

The detentions come as China started a campaign against illegal fundraising to protect consumers. Li Yunze, head of China’s National Administration of Financial Regulation, [vowed](http://www.cbirc.gov.cn/cn/view/pages/ItemDetail.html?docId=1127915&itemId=915) in a speech on Friday to deal with a number of major cases to protect the rights and interest of consumers.

More broadly, Beijing has been engaged in a crackdown on alleged corruption in the nation’s finance industry since 2021, handing out severe penalties, including the death penalty, to top executives.

Evergrande missed payments on 40 billion yuan ($5.6-billion) of wealth management products in 2021, [sparking](https://www.bloomberg.com/news/articles/2021-12-31/evergrande-dials-back-payment-plan-for-overdue-wealth-products) nationwide demonstrations and putting pressure on Beijing to find a solution to avoid further unrest. More than 70,000 people had bought the products, including many Evergrande employees, as the cash-strapped developer tapped them for funding.

The money management arm of Evergrande said on 31 August that it [couldn’t make payments](https://www.bloomberg.com/news/articles/2023-08-31/china-evergrande-unable-to-pay-wealth-products-in-cash-crunch) due on investment products because of a liquidity crunch.

China Evergrande is undergoing the country’s biggest restructuring ever, and the protracted process remains in limbo as key votes on its offshore-debt revamp plan were further delayed to October.

The government has also set up a joint venture to take over China Evergrande’s insurance arm. State-backed Hai Gang Life will run Evergrande Life Assurance Co, according to notices issued by the National Administration of Financial Regulation on Friday.