Evergrande shares fell 19.1 per cent on Monday, after the company said it was unable to issue new debt as the result of an investigation into one of its subsidiaries.
The property developer cannot “meet the qualifications for the issuance of new notes”, as its principal subsidiary, Hengda Real Estate Group, is being investigated, it said in a Hong Kong stock exchange filing on Sunday.
Hengda Real Estate said in August that it was being probed by the China Securities Regulatory Commission for a suspected breach of information disclosure rules.
The announcement comes two days after Evergrande cancelled creditor meetings scheduled for Monday and Tuesday, citing weaker-than-expected sales and the need to reassess its restructuring terms.
