Xu Jiayin, also known as Hui Ka Yan in Cantonese, has been subject to “mandatory measures” on suspicion of crimes, Evergrande said Thursday in a filing to the Hong Kong stock exchange. The company didn’t elaborate on Xu’s location or the nature of the alleged crimes. Under the Chinese legal system, “mandatory” or “compulsory” measures can include detention and formal arrest.
In August, it filed for bankruptcy protection in the United States as part of the process. But last Friday, Evergrande canceled meetings with overseas investors scheduled for this week. It said it needed to reassess the terms of the restructuring plan, in part because sales had been weaker than expected. Taken together, the detention of its chairman, the criminal and regulatory probes, and its inability to issue new debt means the company’s restructuring could fail.