China Evergrande stock tumbles after staff detained

STORY: Shares of embattled developer China Evergrande plunged early on Monday, after police detained some of its wealth management staff.

It suggests a new investigation into the property firm that could add to its long-running woes.

China Evergrande is at the center of a crisis in China's property sector, which has seen a string of debt defaults since late 2021 that have rattled global markets and sparked fears of contagion.

On Saturday night, police in the southern city of Shenzhen said in a statement:

"Recently, public security organs took criminal compulsory measures against Du and other suspected criminals at Evergrande Financial Wealth Management Co."

A man named Du Liang was identified by staff as general manager and legal representative of Evergrande's wealth management unit, during protests by disgruntled investors at Evergrande's Shenzhen headquarters in 2021.

A report by the Chinese state-backed Shanghai Securities News cited a source saying the person named by police as Du should be Du Liang.

Reuters could not confirm that he was among those detained.

The police statement also did not specify the number of people detained, the charges or the date they were taken into custody.

Evergrande has not responded to a request for comment on the police action.

The world's most indebted property developer only resumed trading late August, after the Hong Kong Exchange suspended its stock trade for 17 months.

On Monday, its stock plunged as much as 25% in early morning trade, though regained ground later in the day.

Earlier this month, Evergrande said it was delaying its decision on offshore debt restructuring to next month, to give its debt holders more time to consider its restructuring plan.