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The Markets
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Real Estate

China Evergrande sued by property agencies over unpaid commission

The vastly indebted property developer is already under pressure after missing two sets of bond interest payments in recent weeks

China Evergrande is being sued by two property agencies over unpaid commissions, ramping up the pressure on the world's most indebted property company.

The Hong Kong property agencies filed a joint lawsuit against the company, local media reported.

Evergrande is already under pressure from bondholders, having missed two sets of interest payments on its offshore bonds in recent weeks.

One of the agencies, Midland Holdings, is suing Evergrande for HK$43.45mln (£4.1mln) of unpaid commission for two developments in Hong Kong, the South China Morning Post reported overnight, while the other, Centaline, made a court claim for HK$3.1mln last month, according to a court filing seen by Reuters.

Centaline China told the news agency it also filed a suit against Evergrande in a court in southern China to claim hundreds of millions of yuan the property agency said it is owed.

Evergrande's difficulties paying interest on part of its US$300bn-plus of liabilities and its trouble selling off assets to help with this deleveraging has spooked local and global financial markets.

Investor worries about a domino effect were heightened when smaller rival Fantasia Holdings this week failed to make a repayment on a US$205.7mln bond

This, said market analyst Naeem Aslam at AvaTrade, "shows that Beijing’s steps to contain the Evergrande issue may come out to be ineffective in the end".

Evergrande shares have been suspended since Monday, at the request of the developer as its property management division was said to be close to a possible 'major transaction'.

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