China Evergrande: key executive at EV unit arrested for unspecified crimes, 3 months after founder Hui Ka-yan’s detention

Executive director Liu Yongzhuo has been detained for unspecified crimes, China Evergrande New Energy Vehicle Group says in filing

Arrest follows founder’s Hui Ka-yan’s detention in September, scuttling the developer’s US$20 billion offshore debt reorganisation

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China Evergrande New Energy Vehicle Group’s research headquarters in Shanghai, seen in September 2021. Photo: Bloomberg

Published: 6:00pm, 8 Jan 2024Updated: 7:36pm, 8 Jan 2024

Chinese authorities arrested a key executive from the troubled China Evergrande Group for unspecified crimes, more than three months after detaining the group founder Hui Ka-yan, presenting another major hurdle to its debt reorganisation.

Liu Yongzhuo, an executive director at China Evergrande New Energy Vehicle Group, “has been detained in accordance with the law on suspicion of crimes,” the company said in a Hong Kong stock exchange filing on Monday, without elaborating. China Evergrande owned 58.5 per cent of the new energy vehicle (NEV) producer at the end of 2022, according to its latest annual report.

The stock sank as much as 23 per cent after the disclosure, before closing 6 per cent lower at HK$0.39. The stock slumped 84 per cent in 2023, bringing the cumulative decline in market value to HK$4.23 billion (US$541.8 million) over the past five years.

Liu Yongzhuo, seen in a June 11, 2012 file picture when he was the general manager of Guangzhou Evergrande football club. Photo: AFP

Liu, 42, joined the Evergrande group in December 2003 and was made chairman of Evergrande Football Club, Evergrande Spring Water Group and Evergrande High-Tech Group, according to the NEV maker’s 2022 annual report. He had 21.7 million shares, or a 0.22 per cent stake, and stock options in the company.

Liu has more than 20 years’ experience in real estate project investment and operation, sports operation and corporate operational management in various industries, it added.

China placed Evergrande’s billionaire founder and chairman Hui under “mandatory measures” in late September last year, also on unspecified crimes, a development that eventually scuttled an agreement with offshore creditors to reorganise some US$20 billion of defaulted debts.