A Hong Kong court on Monday ordered China Evergrande Group to liquidate, leading to shares of the property developer crashing.
The decision was made by Hong Kong Justice Linda Chan after the company failed to offer an effective solution to its $300 billion debt amid a growing housing crisis in China. Evergrande is the world's most indebted developer, Reuters noted.
Evergrande and its overseas creditors failed to secure a deal that would help restructure the company, forcing the court to make its decision.
Evergrande, as well as other developers in China, have continued to accept payments from home buyers for apartments that the companies were not able to deliver, the New York Times explained. Despite the developers defaulting, the Chinese government has forced the developers to finish the buildings even with contractors and builders not being paid for years.
China Evergrande shares plunged by 20% before the hearing, but trading was halted after the verdict was passed.
Evergrande reportedly has $240 billion in assets. The decision is expected to rock the already fragile Chinese financial market.
