Chinese property developer Country Garden has suspended trading of its shares on the Hong Kong Stock Exchange, citing the need for more time to gather information as it restructures its debts. This move comes after the company delayed the publication of its annual financial results and defaulted on overseas debt last year. A winding-up petition has been filed against the company by Ever Credit Ltd, a unit of Kingboard Holdings, with a hearing scheduled for 17 May.
The suspension of Country Garden’s shares coincided with the reopening of the Hong Kong stock market after the Easter weekend. Another Chinese state-backed property developer, China Vanke, also faced challenges as its shares fell to a record low. The real estate industry in China has been under financial strain since 2021 when the government implemented measures to limit the borrowing capacity of big developers. Several major Chinese property developers, including Evergrande and Country Garden, have defaulted on their debts in recent years.
The struggles in China’s property market are significant as it contributes around a third of the economy. To counter these challenges, Beijing has introduced various measures to stimulate housing demand. In addition to this development, China’s financial markets regulator accused Evergrande and its founder Hui Ka Yan of inflating revenues by $78 billion in two years leading up to their debt default. Hengda Real Estate, a subsidiary of Evergrande, was fined $583 million and Mr. Hui faces potential lifetime ban from China’s financial markets.
