In a filing to Hong Kong’s stock exchange on Thursday, the developer said it had “received notification from relevant authorities” that Hui “has been subject to mandatory measures in accordance with the law due to suspicion of illegal crimes.” The developer would suspend trading “until further notice.”

The admission confirms earlier reports that the billionaire developer was in some form of police custody. On Wednesday, Bloomberg reported that Chinese law enforcement put Hui under “residential surveillance,” a measure that confines him to a single location and bars outside communication without permission. Such measures last no longer than six months, and don’t always lead to criminal charges, according to Bloomberg.

Evergrande’s shares have only been back on the market for a month, resuming trading on Aug. 28. During that period, Evergrande shares fell over 80%, from $0.21 to $0.04. (Evergrande shares traded around $4 at their peak in 2017).

Evergrande is at the heart of China’s real estate crisis that has impacted fellow real estate giant Country Garden and others. Once among China’s largest developers, Evergrande loaded up on debt to fund its expansion. Yet new rules from Beijing meant to encourage developers to reduce their risk instead sparked a liquidity crisis. 

As funding dried up, Evergrande defaulted on its debt in December 2021, which in turn pushed other developers into default as well. 

Evergrande lost a combined $81 billion in 2021 and 2022, according to financial results published earlier this year as it prepared to resume trading of its shares.

In August, the company said it lost another $4.5 billion in the first half of 2023, and reported $327 billion in liabilities against $238 billion in assets, according to an exchange filing in August when its shares resumed trading.

Evergrande’s very bad week

Evergrande’s trading suspension caps days of bad news. On Friday, the company canceled key meetings with its creditors, where lenders would evaluate its debt restructuring plan. The company cited lower-than-expected sales for the delay.

Then, on Sunday, Evergrande revealed it would be unable to issue new debt, due to a regulator probe into its main domestic subsidiary. On Monday, Chinese outlet Caixin reported that law enforcement had detained Evergrande’s former CEO and CFO, along with other executives, as part of an investigation into whether the company misused funds. 

Finally, on Monday, Evergrande missed another bond payment, this time on a yuan-denominated bond worth $547 million. 

Evergrande doesn’t have long to find a solution. On Oct. 30, Hong Kong courts will hold a hearing on a “winding-up petition,” which if successful will liquidate the company. 

Some of Evergrande’s lenders are ready to give up, with some offshore creditors telling Reuters that they’d be ready to support liquidation if Evergrande does not present a viable restructuring plan by the end of October.