A Hong Kong court on Monday ordered the liquidation of property giant China Evergrande Group, dealing a fresh blow to confidence in the country’s fragile property market as policymakers step up efforts to contain a deepening crisis.

Justice Linda Chan decided to liquidate the world’s most indebted developer, with more than $300 billion of total liabilities, after noting Evergrande had been unable to offer a concrete restructuring plan more than two years after defaulting on its offshore debt and following several court hearings. “It is time for the court to say enough is enough,” Chan said in court on Monday.

Read China Evergrande shares tumble 25%

The decision sets the stage for what is expected to be a drawn-out and complicated process with potential political considerations as investors watch whether the Chinese courts will recognise Hong Kong’s ruling, given the many authorities involved. Offshore investors will be focused on how Chinese authorities treat foreign creditors when a company fails.

Published in The Express Tribune, January 30^th, 2024.

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