A group of offshore creditors of China Evergrande Group said they were “left in the dark” after the developer scrapped a meeting for its multi-billion dollar restructuring plan, in the latest example of investor frustration with governance issues at some Chinese firms.

The holders of more than US$6 billion of the defaulted builder’s offshore public bonds implored the company to resolve any regulatory issues with the country’s securities regulator and top economic planning agency, describing the development as a “complete surprise”, according to a press release on Monday (Oct 9).

The comments came after Evergrande said late last month that it was cancelling key creditor meetings and must reassess its proposed restructuring. One of the major setbacks the builder cited was that it’s been unable to meet regulator qualifications to issue new bonds, which had been a crucial part of its restructuring proposal.

The creditors’ complaint adds a new twist to Evergrande’s increasingly uncertain destiny, now that Chinese authorities also have launched a probe into founder Hui Ka Yan’s suspected crimes. The world’s most indebted developer with liabilities exceeding US$300 billion will face an Oct 30 court hearing in Hong Kong of a petition to liquidate the firm.

The latest development also expands a growing list of distressed Chinese companies, including Evergrande’s industry peer Country Garden Holdings Co, that have faced criticism of weak governance and disclosure practices that are putting investors off the country’s borrowers longer-term.

Evergrande’s position “that the restructuring cannot be implemented for regulatory reasons just does not add up”, according to the press release. “It is difficult to believe that NDRC would actually stop a distressed company from restructuring” by means of amending defaulted debt, it added, referring to the state planning agency National Development and Reform Commission.

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The ad hoc creditor group is advised by Moelis & Company Asia and Kirkland & Ellis, and its members comprise international investors based in New York, London and Hong Kong, the release said. BLOOMBERG