A Hong Kong court on Monday ordered the liquidation of property company China Evergrande Group, to open a new tab, a move likely to send ripples through China’s crumbling financial markets as policymakers scramble to contain the deepening crisis. Evergrande, the world’s most indebted developer with more than $300 billion of total liabilities, sent a struggling property sector into a tailspin when it defaulted on its debt in 2021.

The decision was made by Hong Kong Justice Linda Chan who said “Enough is enough” after Evergrande had failed to offer efficient communications or resolutions over more than 18 months.

The company’s shares were trading down as much as 20 per cent before the hearing. Trading was halted in China Evergrande and its listed subsidiaries after the verdict.

The liquidation ruling for the developer, which has $240 billion of assets, will likely 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.

The liquidation process could be complicated, with potential political considerations, given the many authorities involved. But it is expected to have little impact on the company’s operations including home construction projects in the near term, as it could take months or years for the offshore liquidator appointed by the creditors to take control of subsidiaries across mainland China – a different jurisdiction from Hong Kong.

Evergrande had been working on a $23 billion debt revamp plan with the ad hoc bondholder group for almost two years. Its original plan was scuppered in late September when it said its billionaire founder Hui Ka Yan was under investigation for suspected crimes. The liquidation petition was first filed in June 2022 by Top Shine, an investor in Evergrande unit Fangchebao which said the developer had failed to honour an agreement to repurchase shares it had bought in the subsidiary.

The proceedings had been adjourned multiple times and Justice Chan has said previously the December hearing would be the last before a decision was made whether to liquidate Evergrande in the absence of a “concrete” restructuring plan. Before Monday, at least three Chinese developers have been ordered by a Hong Kong court to liquidate since the current debt crisis unfolded in mid-2021.