Investors have been dumping Chinese stocks at an unprecedented pace, exiting the world’s second largest economy despite efforts by Beijing to juice growth by borrowing more to fund extra spending.
The probe comes weeks after founder Terry Gou announced his bid for Taiwan’s presidency and stressed that he won’t be pressured by Beijing, despite his extensive business operations in the country.
China Evergrande’s US$20 billion debt workout plan is at risk of falling apart in the home stretch, as the ‘arrest’ of Hui Ka-yan clouds the founder’s capacity to deliver his obligations.
The company is facing major uncertainties in its efforts to restructure its international debt, while battling a winding-up petition in Hong Kong courts.