Mr Lyddon, founder of Lyddon Consulting Services Ltd, who has issued previous warnings about China\u2019s economy, said the latest developments were hugely significant – and even suggested civil unrest was a possibility in the country, let by President Xi Jinping.<\/p>\n
He told Express.co.uk: \u201cThis is a threat to the Communist Party and the stability of China and of Hong Kong.<\/p>\n
\u201cThis makes war more likely: in order to distract attention from their own mistakes the Communist government will ramp up its rhetoric about Taiwan and invade.\u201d<\/p>\n
Referring to the invasion of the remote archipelago in 1982, which prompted then-Prime Minister Margaret Thatcher to send a task force to liberate the islands, Mr Lyddon continued: \u201cJust like the Falklands: the Fascist Argentinian regime used the Falklands as their distraction topic from their repression and mistakes at home.\u201d<\/p>\n
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The three-month Falklands war cost almost 1,000 lives, and resulted in Argentinian forces being ejected from what is remains a British overseas territory.<\/p>\n
Confirmation that Evergrande had ceased trading was \u201cvery bad indeed\u201d for China\u2019s economy, Mr Lyddon explained.<\/p>\n
He said: \u201cIt means that those who have put down deposits may well have lost them.<\/p>\n
\u201cThe business model is the original Ponzi scheme: the cash placed as deposits by today’s new customer is used to finish building the apartment block for which customers placed their deposits two or three years ago.<\/p>\n
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Don’t miss… <\/strong> \u201cToday’s new customer can only ever have hoped that future new customers would commit in two or three years’ time and place deposits with which to finish the apartment block for today’s new customer.<\/p>\n \u201cIf that system breaks, then you have a lot of desperate and disaffected people throughout China who suddenly find that there are millions of them in the same position.<\/p>\n \u201cToo many, dispersed all around that massive country, for the police to put the muzzle on effectively.\u201d<\/p>\n The company has not elaborated on the crimes of which Hui is suspected.<\/p>\n Evergrande is the world\u2019s most heavily indebted real estate developer and is at the centre of a property market crisis which is dragging on China\u2019s economic growth.<\/p>\n The group is undergoing a restructuring plan, including offloading assets, to avoid defaulting on its massive debts.<\/p>\n Shares of Evergrande closed at 32 Hong Kong cents on Wednesday. The company had resumed trading on August 28 after a 17-month hiatus. Trading in two other units, China Evergrande New Energy Vehicle Group and Evergrande Property Services Group, was also halted Thursday.<\/p>\n Last week, Evergrande said in a filing that it had to delay a proposed debt restructuring meeting with creditors as \u201csales of the group have not been as expected by the company”.<\/p>\n On Friday, China\u2019s national financial regulator announced it had approved the takeover of the group\u2019s life insurance arm by a new state-owned entity.<\/p>\n In August, Evergrande applied for Chapter 15 bankruptcy protection filing in New York, which allows a US court to halt litigation and other collection efforts in the US in cross-border insolvency cases.<\/p>\n
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