The chair of China’s Evergrande Group has reportedly been put under police surveillance as another missed bond payment casts further doubt over the future of the world’s most indebted property developer. Hui Ka Yan, who founded Evergrande in 1996, was taken away earlier this month and is being monitored at a designated location, according to Bloomberg. It is not clear why Hui might have been placed under residential surveillance, which falls short of a formal detention or police arrest and does not mean a criminal charge follows. However, the development suggests the developer’s woes may be entering a new era: entanglement with the criminal justice system. Earlier this month, several employees of Evergrande’s wealth management unit were arrested in Shenzhen, on unspecified charges. Two former executives were also reportedly detained recently. Pan Darong and Xia Haijun had resigned last year after it emerged that 13.4bn yuan (£1.5bn) of deposits had been used as security for third-party loans. Earlier this week, Hengda Real Estate, Evergrande’s primary unit in mainland China, missed principal and interest payments on a 4bn yuan bond. Hui resigned from his position as Hengda chair in 2021. Evergrande said it was unable to sell new debt, a key part of its proposed restructuring plan, because the unit was being investigated by Chinese authorities. The company, once China’s top property developer, was found in 2021 to be struggling with 1.97tn yuan in liabilities, as government officials tightened scrutiny on the real estate sector. Its liquidity crisis soon made it a symbol of the country’s property sector woes. Earlier this year, it laid out a plan to compensate investors with notes linked to its listed Hong Kong subsidiaries, which include an electric vehicle company and a property management business. Evergrande, which has cancelled meetings with creditors scheduled for this week, cannot now issue new notes against those businesses. The company faces a court hearing in Hong Kong on a winding up petition that could force it into liquidation. The hearing, which was scheduled for July, is due to take place on 30 October. In 2020, a regulatory crackdown on high levels of debt among real estate developers sent the industry, which previously accounted for about a quarter of China’s GDP, into a tailspin. Three years later, the effects are still being felt, with Country Garden, previously China’s biggest developer by sales, also in crisis. On Wednesday, the company was on the hook for a $40m (£33m) coupon payment. The firm is expected to make use of a 30-day grace period on that payment to restructure its liabilities, worth about 257.9bn yuan, in a bid to avoid a total default. In August, Evergrande filed for chapter 15 bankruptcy protection in New York to protect its US assets as the company hopes to restructure its finances.