Head of real estate giant Evergrande held by Chinese police

The billionaire boss of the Chinese real estate giant Evergrande, Hui Ka Yan, is being held by the police, The Bloomberg agency said on Wednesday, at a time when the indebted company is dealing with serious financial difficulties. The tycoon, also known as Xu Jiayin in Mandarin, was taken away by authorities weeks ago.

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He is kept under "residential surveillance," which does not mean he has been arrested or charged with a crime.n, according to this economic information agency. Guancha, a private pro-government media outlet, indicated that informed sources confirmed the version. He added that Hui was handed over to authorities "a few days ago" and that he remains in Beijing.

The AFP agency called Evergrande's offices in Hong Kong and mainland China to ask about the case but did not receive a response. Chinese Foreign Ministry spokesman Wang Wenbin said at a press conference on Wednesday that he was "not aware of the situation" when asked about Bloomberg's version.

Evergrande's enormous debt, which the company estimated at $328 billion at the end of June, has contributed to the worsening of the real estate crisis in China, generating fears of global contagion. The real estate branch of the company defaulted on a key debt this weekand the Chinese financial site Caixin reported that former executives of the firm were detained.

Hui, 65, became the richest man in China, with a particular taste for luxury brands and yachts. His wealth is currently estimated at $1.8 billion, up from $42 billion in 2017, according to the Bloomberg Billionaires Index. The real estate sector is a pillar of Chinese economic growth and registered a spectacular boom in recent years.

But the massive debt accumulated by the largest players in the sector was considered by the Chinese authorities as an unacceptable risk for the financial system and the economy as a whole. Given this, the government severely limited its access to credit, which led several companies to default, as happened with Evergrande.

dmr