(Yicai Global) July 20 -- Shares in China Evergrande Group plunged as much as 15.8 percent today, following a similar crash yesterday, after the heavily indebted property developer was hit by more bad news with the suspension of two of its projects in central Hunan province for the misuse of presale funds.

Evergrande’s stock price closed down 10.84 percent at HKD7.32 (USD1). Earlier in the day it fell to HKD6.91. Its bonds and units’ shares did just as badly.

Yesterday the company’s share price crashed as much as 17 percent when the developer said it will sue China Guangfa Bank for abusing a legal clause that has allowed it to seek CNY132 million (USD20.4 million) in cash or assets from Evergrande nine months before the loans in question are due.

The Shaoyang Municipal Bureau of Housing and Urban-Rural Development halted the online announcement of sales in two Evergrande projects, without which the transactions cannot go ahead, for allegedly using presale funds without informing the authorities and deliberately evading inspection, The Paper reported yesterday.

Some CNY528 million (USD81.4 million) was paid to unit Shaoyang Yida Real Estate Development between Jan. 1 and July 13, but only CNY123 million entered the account, the bureau said on July 14.

Despite being summoned for talks, Evergrande did not change its practices and as a result the bureau has decided to suspend the presale license, online signing and presale fund allocation of the two projects from now until Oct. 13, the bureau said.

Evergrande’s subsidiaries also lost heavily. China Evergrande New Energy Vehicle Group [HKG:0708] slumped 17.89 percent, Hengten Network Group [HKG:0136] plunged 11.11 percent and Evergrande Property Services Group [HKG:6666] dropped 3.27 percent. This follows falls of between 11.8 percent and 19.1 percent yesterday.

And its bonds weakened. 15 Evergrande 03 retreated 4.98 percent to CNY65.49 (USD10.09), 19 Evergrande 01 sank 9.99 percent to CNY62, 19 Evergrande 02 dropped 6.8 percent to CNY67, 20 Evergrande 01 declined 9.38 percent to CNY71.5 and 20 Evergrande 02 tumbled 10.21 percent to CNY65.58. This comes on top of drops of between 8.6 percent to 12.76 percent yesterday.

Editor: Kim Taylor