The prolonged suspension of Evergrande’s shares has helped push the value of frozen stocks in Hong Kong to a record US$61bn, throwing in to stark relief the city’s limited shareholder protections.
Troubled property developer Evergrande halted trading of its Hong Kong-listed stock and that of its property services unit on October 4, stating in an exchange filing from the latter that the move had been taken ahead of a “possible general offer” for its shares. But after more than two weeks, the company has yet to disclose anything else about the apparent deal, nor make any statement about five missed payments totalling more than $275m to international bondholders.
Corporate governance professionals said the stonewalling of shareholders by Evergrande, whose high-profile liquidity crisis is being monitored by global markets, struck at Hong Kong’s reputation for providing a base for investing in China grounded in international financial norms.