The price of Chinese real estate giant Evergrande's shares jumped as trading resumed Tuesday, after being suspended last week following the debt-laden company's announcement that its chairman was under criminal investigation.
Last Thursday, Evergrande said its president, Xu Jiayin, was suspected of violating the law, after reports that he had been detained by police. On the same day, trading in the company's shares was suspended on the Hong Kong Stock Exchange.
After the resumption of trading in Evergrande shares on Tuesday, prices initially jumped more than 60 percent before falling to 10 percent and then rising again.
Evergrande estimated its debt at the end of June at $328 billion.
In recent decades, the real estate sector in China has witnessed rapid growth, allowing developers to sell their properties even before their construction is completed, which enables them to finance other projects.
However, the debts of real estate groups reached levels that prompted the authorities to put an end to the expansion of these companies as of 2020.
Since then, access to credit has declined significantly for these groups and some have been unable to complete their projects, exacerbating the crisis of confidence among potential buyers and driving down prices.
In recent months, this unprecedented crisis has affected another large company in this sector, Country Garden, which was known for its financial strength.
In 2017, Xu Jiayin was the richest man in Asia, with his wealth estimated at $45.3 billion at the time.
But since the setbacks his group suffered, his wealth has declined significantly, reaching $4.3 billion in 2022, according to the Hurun Billionaires Ranking.
