Evergrande, number one of the electric car subsidiary “Nev” arrested for “committing crimes”
Evergrande New Energy Vehicle (Nev), the electric car subsidiary of the Chinese real estate giant Evergande in default at the end of 2021, reported “that it has learned that its executive director Liu Yongzhuo is in a state of detention” on charges of committing crimes. The company reports this in a note sent to the Hong Kong Stock Exchange, where its titles are treated and they were suspended this morning pending the “release of information”. Trading in the shares will resume in the afternoon session, the company said
Evergrande Nev shares, which returned to trading on the Hong Kong Stock Exchange at 1pm local time (6 in Italy), are currently down 12.05%. News of Liu's detention followed parent company Evergrande's September 2023 announcement that its chairman and founder Xu Jiayin was “subject to mandatory measures” by Chinese authorities for multiple law violations.
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“The company has learned that its executive director, Liu Yongzhuo, has been arrested in accordance with the law on suspicion of crimes,” the electric vehicle subsidiary said, without providing details on the charges. The company, which is suffering from the financial difficulties of its parent company, said in March 2023 that it was struggling to guarantee liquidity to service its primary activities.
After a long delay, the company began production of its first electric vehicle model, the Hengchi 5, in 2022. Evergrande Nev shares were suspended for 15 months between April 2022 and July 2023, due to the failure to publish results financial by the company. It currently has a market value of around $570 million, having lost nearly half its market capitalization in five years. The Shenzhen group, crushed by debts of around 330 billion dollars, is in an increasingly critical situation: a Hong Kong court granted additional time in December, deciding on a new extension to the end of January to develop a restructuring plan with the support of creditors and avoid the dramatic prospect of liquidation.
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