Evergrande shares have been suspended in Hong Kong following claims that its chairman has been placed under police observation.

It comes on the heels of rumors earlier this week that additional current and former executives had been detained.

The cause for the trading stop was not stated in Thursday’s market statement.

However, it is another low point for the massively indebted property firm, which defaulted in 2021, precipitating China’s current real estate market crisis.

In August, the company filed for bankruptcy in New York in order to protect its US assets while negotiating a multibillion-dollar settlement with creditors.

The firm’s previous 17-month suspension was overturned just a month ago, thus the market trading halt comes as a surprise.

Evergrande, formerly regarded as the most valuable property developer in the world, is at the center of a real estate crisis that threatens the world’s second largest economy.

With almost $300 billion (£247 billion) in debt, the company has been rushing to acquire funds by selling assets and shares to repay suppliers and creditors.

The majority of Evergrande’s debt is owing to Chinese residents, many of whom are ordinary folks whose homes have yet to be completed.

When the company defaulted on its massive obligations in 2021, it sent shockwaves through global financial markets because the property sector accounts for nearly a quarter of China’s economy.

Several other large developers in the country have defaulted in the last year, and several are struggling to complete projects.

Evergrande disclosed in July that it had lost 581.9 billion yuan ($79.6 billion; £65.6 billion) in the previous two years.

It has been working on a new repayment plan, and the corporation appeared to be getting closer to resolving the issue after filing for bankruptcy in the United States.