HONG KONG, Jan 29 (Reuters) - A Hong Kong court on Monday ordered the liquidation of property giant China Evergrande Group (3333.HK), opens new tab, a move likely to send ripples through China's crumbling financial markets as policymakers scramble to contain a deepening crisis.
The decision to liquidate the world's most indebted developer with more than $300 billion of total liabilities was made by Hong Kong Justice Linda Chan, who noted Evergrande had been unable to offer a concrete restructuring plan despite months of delays.
"It is time for the court to say enough is enough," she said.
Chan will deliver her reasons for granting the liquidation at 2:30 pm (0630 GMT). It is expected a provisional liquidator will be appointed to oversee Evergrande ahead of a permanent appointment.
Evergrande, which has $240 billion of assets, sent a struggling property sector into a tailspin when it defaulted on its debt in 2021 and the liquidation ruling will likely further jolt already fragile Chinese capital and property markets.
Beijing is grappling with an underperforming economy, its worst property market in nine years and a stock market wallowing near five-year lows, so any fresh hit to markets could further undermine policymakers' efforts to rejuvenate growth.
"Evergrande's liquidation is a sign that China is willing to go to extreme ends to quell the property bubble," said Andrew Collier, Orient Capital Research managing director.
"This is good for the economy in the long term but very difficult in the short term."
Evergrande's shares were trading down as much as 20% before the hearing. Trading was halted in China Evergrande and its listed subsidiaries China Evergrande New Energy Vehicle Group (0708.HK), opens new tab and Evergrande Property Services (6666.HK), opens new tab after the verdict.
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