Evergrande is facing a criminal probe after Dr. Marco Metzler, a credit analyst and Evergrande creditor, accused the developer of committing insolvency fraud in documents submitted to the Director of Public Prosecutions in the Cayman Islands. He said that while Evergrande defaulted in December, the directors did not file for bankruptcy in the Caymans, thereby breaching their duties. “This takes time. To be declared bankrupt by the court can take another three to four weeks… to reduce the cost risk for each claimant, we are offering other international and national creditors to join our proceedings”, he said. Dr. Metzler’s hence claims that Evergrande has deceived creditors and breached their duty of care, as the developer has likely incurred a substantial monetary loss.
Separately, SCMP notes that Evergrande is losing some property projects like its theme park and a mixed development real estate project. Its theme park in Guangzhou’s Nansha district was taken over on January 26 by the China Minmetals Group’s Minmetals International Trust for RMB 1.1bn ($170mn). Similarly, the latter came under the control of state-owned China Everbright Group for RMB 1.03bn ($160mn) on Monday.
Evergrande’s dollar bonds were steady, trading at ~15 cents on the dollar.