On August 23rd three provincial and municipal anti-corruption agencies in Sichuan, Shenzhen and Xiamen issued an announcement. The announcement stated the agencies were investigating Xiamen C&D International Group Chairman Zhuang Yuekai and his colleague Shi Zhen, former China Resources Land Chairman Tang Yong, and Liu Hui, deputy general manager of Shenzhen Talent Settlement Group. The Chinese Communist Party (CCP) government’s past anti-corruption investigations focused on the semiconductor and financial industries may be expanded to include the real estate industry.
The Xiamen Discipline Inspection Commission said Zhuang Yuekai and Shi Zhen are under disciplinary and supervision. Tang Yong and Liu Hui are also under investigation by the Sichuan Mianyang and Shenzhen Discipline Inspection Commissions for the same reason.
As a result of the news, shares of C&D International, which is listed in Hong Kong, plunged 30% to HK$12.9 at one point after the opening bell on the 24th. C&D Property shares once plunged 31.8% to HK$2.4. China Resources Land’s share price fell 4.2% at one point.
The real estate market in the Communist China has been under scrutiny since the outbreak of defaults on overseas bonds of Evergrande Group and Jia Zhaoye Group in December last year. The housing debt crisis and the “Zero Covid” policy have hit economic growth hard, with growth slowing to 0.4% in the 2nd quarter of this year.
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