Trading in shares of heavily indebted Chinese property developer China Evergrande Group was suspended in Hong Kong on Thursday, according to a notice on the Hong Kong stock exchange.

China Evergrande said in a notice on Thursday night that authorities had informed the firm that its chairman, Hui Ka Yan, had been subjected to “mandatory measures in accordance with the law due to suspicion of illegal crimes" and said that trading in the firm's shares was suspended until further notice.

The company didn't elaborate on the crimes that Hui was suspected of.

Evergrande is the world’s most heavily indebted real estate developer and is at the center of a property market crisis that is dragging on China’s economic growth.

The group is undergoing a restructuring plan, including offloading assets, to avoid defaulting on $340 billion in debt.

Shares of Evergrande closed at 32 Hong Kong cents on Wednesday. The company had resumed trading on Aug. 28 after a 17-month hiatus. Trading in two other units, China Evergrande New Energy Vehicle Group and Evergrande Property Services Group, was also halted Thursday.

Last week, Evergrande said in a filing that it had to delay a proposed debt restructuring meeting with creditors as “sales of the group have not been as expected by the company.”

On Friday, China’s national financial regulator announced it had approved the takeover of the group’s life insurance arm by a new state-owned entity.

Earlier in September, police in Shenzhen, a southern Chinese city, said they had detained some staff at China Evergrande Group’s wealth management unit.

Evergrande ran short of cash after Beijing tightened controls in 2020 on corporate debt that the ruling Communist Party worries is dangerously high. Evergrande said it had more assets than debt but had trouble turning slow-selling real estate into cash to repay creditors.

• Evergrande has defaulted on its debt, Fitch Ratings says
• Evergrande trading suspended as fears mount over indebted Chinese developer

A series of debt defaults in China’s sprawling property sector since 2021 has left behind half-finished apartment buildings and disgruntled homebuyers. Observers fear the real estate crisis may further slow the world’s second-largest economy and spill over globally.

In August, Evergrande applied for Chapter 15 bankruptcy protection filing in New York, which allows a U.S. court to halt litigation and other collection efforts in the U.S. in cross-border insolvency cases.

- by Zen Soo, AP