- Written by Mariko Aoi
- Business reporter
Image source, Getty Images
Country Garden said last week it would postpone its annual earnings report because it faces a petition to liquidate the company
The Chinese real estate development company Country Garden, which is suffering from a crisis, has suspended trading of its shares on the Hong Kong Stock Exchange after delaying the publication of its annual financial results.
The company said last week that it needs more time to gather information while restructuring its debt.
It defaulted on its foreign debt last year and faces a petition to liquidate its accounts.
In January, a Hong Kong court ordered rival real estate company China Evergrande to liquidate.
The first hearing of Country Garden's winding up petition, brought by Ever Credit Ltd, is scheduled to take place on 17 May.
Ever Credit is a unit of Kingboard Holdings, a chip manufacturer and real estate investor.
The suspension of Country Garden shares came as Hong Kong's stock market reopened after the Easter holiday.
Also on Tuesday, shares of state-backed Chinese real estate developer China Vanke fell to a record low.
On Friday, the company announced a more than 50% drop in its annual profit and told investors it aims to boost its cash flow by reducing debt over the next two years.
China's real estate industry has been facing significant financial pressure since 2021 when the government took measures to limit the amount major developers can borrow.
Several major Chinese real estate developers, including Evergrande and Country Garden, have defaulted on their debt in the past few years.
Problems in the country's real estate market are having a major impact as this sector represents about a third of the economy.
Beijing has announced various measures in an attempt to boost housing demand.
Last month, the country's financial markets regulator accused Evergrande and its founder, Hui Ka Yan, of inflating revenues by $78bn (£62.2bn) in the two years before the company defaulted on its debt.
The company's subsidiary Hengda Real Estate was fined $583.5 million, while Mr Hui faces a lifetime ban from China's financial markets.