(Yicai Global) Dec. 13 -- Shares of Guangzhou R&F Properties slumped after the Chinese developer confirmed that its chairman and real estate tycoon Zhang Li was arrested in the United Kingdom on US bribery charges.

R&F Properties [HKG: 2777] finished down 11.5 percent at HKD2.15 (28 US cents) a share in Hong Kong today.

Zhang was accused of bribery by hosting a banquet and offering accommodation in China to the former head of the San Francisco Department of Public Works, R&F said in a statement on its WeChat account late yesterday. Zhang is taking legal action against the false accusation, it added.

Zhang, the company’s co-founder, was arrested in London on Nov. 30 and faces extradition to the United States, according to media reports. The arrest was made based on allegations that Zhang paid bribes to secure a business deal in California. He was released on a GBP15 million (USD18.4 million) bail and is contesting his extradition.

Zhang founded Guangzhou-based R&F along with Hong Kong billionaire Li Sze Lim in 1993. He ranked 556th on the Forbes World's Billionaires list in 2010, and took the 15th spot on the New Fortune China's Billionaires list with CNY22.3 billion (USD3.2 billion) in 2013.

R&F became one of the leading real estate firms in southern China under Zhang’s leadership. It had sales of more than CNY130 billion (USD18.6 billion) in 2020, but later faced liquidity issues and defaulted on debt. The firm stabilized its situation by selling assets and completing a debt restructuring. 

R&F's bondholders voted to extend the weighted average maturity of the firm's eight corporate bonds worth a total of CNY46.6 billion to over three years from about four months, it said early last month. The firm became the first real estate developer in China to succeed in extending all of its domestic and overseas bonds.

Editors: Tang Shihua, Martin Kadiev