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China Yuanbang declines after chairman held in custody quits
[BEIJING] China Yuanbang Property Holdings Ltd fell by the most in more than two weeks in Singapore trading after saying its chairman is being investigated by Chinese authorities and has resigned.
The shares fell 12 per cent, the most since January 7, to S$0.06 at the noon break, extending this year's decline to 24 per cent. Chairman Chen Jianfeng was taken into custody due to private matters unrelated to the company, according to an exchange filing today. Chen has been staying at a residence designated by prosecutors in the southern Chinese city of Shenzhen, the filing said.
Local land authorities in Shenzhen have halted sales of projects by some developers as Chinese President Xi Jinping expands an anti-corruption campaign. The city's government is seeking investors for stakes in Kaisa Group Holdings Ltd, which has missed a bond and trust payments, and has had some assets frozen by local courts.
Kaisa is being investigated over alleged links to a local official who's being probed, people familiar with the matter have said.
China Yuanbang hasn't received any legal documents in connection with the investigation, said the company, which is based in Guangzhou, near to Shenzhen. Chief executive Zhou Xiaoxiong continues to manage daily operations, according to the statement.
Litigation risks have increasingly been perceived as a threat to Chinese real estate companies and have pushed up bond yields of smaller developers, ABCI Securities Co's Hong Kong-based analyst Kenneth Tung wrote in a January 23 report.
China Yuanbang, set up in 1998, has built more than 3 million square metres (32 million square feet) of properties, mainly homes, mostly in Guangzhou and neighbouring cities, according to its website.