Zhenro founder under ‘compulsory measures’ by China authorities

THE founder of Chinese developer Zhenro Group has been placed under “compulsory measures” by authorities on suspicion of crime.

The builder did not provide any details on the measures or what law Ou Zongrong is alleged to have broken, according to a filing by Zhenro Real Estate to the Shanghai Stock Exchange on Monday (Jan 20). Ou does not hold any positions such as directors, supervisors or senior managers in the company, Zhenro said in the filing.

Founded by Ou in 1998, Zhenro Group is among developers with origins in the province of Fujian whose fortunes have turned for the worse during China’s crackdown on leverage in the property industry. Its Hong Kong-listed flagship Zhenro Properties Group defaulted on its dollar bonds for the first time in 2022. Ou, who is a senior adviser of Zhenro Properties, holds a roughly 46 per cent stake along with his wife, according to the exchange filing.

Calls to Zhenro’s office in China were not answered outside of normal business hours, while the company’s media and investor relations department did not immediately respond to an e-mailed request for comment.

Deepening debt woes among Chinese property developers remain an overhang for China’s housing market as the nation’s real estate crisis enters its fifth year. Several major developers, including Sunac China Holdings and China Vanke are struggling with debt repayment and liquidity concerns.

Investors were whipsawed last week over the whereabouts of Vanke’s chief executive officer. The Economic Observer reported that Zhu Jiusheng had been taken away by police, and that the Shenzhen government sent a working group to intervene in Vanke. A few hours later, another publication said Zhu was reached by phone. The Economic Observer’s stories were removed on Friday.

SEE ALSO

China steps up Vanke intervention as developer woes deepen

Vanke and the Shenzhen city government did not immediately respond to requests for comment. BLOOMBERG