A Massive Chinese Property Company Just Canceled A Share Offering, And There Are Rumours The Chairman Is Missing

China houses apartments smog housing ReutersA residential compound is seen during a smoggy day in Wujiaqu, Xinjiang Uighur autonomous region, November 19, 2013. Picture taken November 19, 2013

Trading in Agile Property Holdings, a $US20 billion real estate development company in mainland China, has been suspended since Oct. 3rd, pending information about a share offering that was supposed to take place on Oct. 10th.

On Thursday, the company announced that the $US350 million share offering wouldn’t take place at all.

And now rumours are circulating that the company’s billionaire Chairman, Chen Zhuolin, has gone missing. He and his family are controlling shareholders in the company.

Agile was having major problems long before this month. Back in the spring of 2013, authorities dropped two indecent assault charges against Chen — a saga which shaved 21% from the stock until the case was closed. The company’s stock price has plummeted 45% in the last year.

On Oct. 7th a report posted on the internet connected Chen to Zhou Yongkang — China’s former security chief, and the highest level official taken down in President Xi Jinping’s anti-corruption drive. Chen denied this connection.

In a statement Friday, the family said that it would support future fundraising efforts with its own cash if necessary. However, the company has refused to comment on chatter that Chen has gone missing.

What everyone’s most worried about here is another big property company collapse, leaving piles and piles of debt and sucking liquidity out of an already fragile system. China’s property sector is cooling along with the rest of the economy. And now more than ever before the government is showing signs that it’s going to take aggressive action to support the sector in order to allow the economy to balance.

So Agile may very well be on its own on this one.

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