HONG KONG (BLOOMBERG) – Distressed Chinese developer Shimao Group Holdings and four units have been sued by UOB in Hong Kong, adding to broader signs of growing investor impatience amid the nation’s worsening property debt crisis.

UOB alleged that Shimao and the group entities breached terms of certain loan and security agreements by purportedly reallocating loans and allotting shares between the entities without the Singapore bank’s consent, according to a writ in the Hong Kong High Court dated July 12.

The accusations involve the terms of an agreement from 2017 for UOB and other lenders to grant loan facilities of up to HK$10 billion (S$1.76 billion) to group entity Adventure Success. The terms were meant to secure the obligations of the unit, which holds a private residential land development project in Hong Kong’s Kowloon area.

Luxury builder Shimao, which ranked as China’s 22nd biggest by sales in the first half of this year, was once considered one of the country’s stronger developers. But it has been trading at deeply distressed levels in the United States dollar bond market for months now. The company also suffered its first-ever default on a public note earlier this month when it missed payment on a US$1 billion (S$1.38 billion) security.

Shimao is among a growing number of real estate firms whose troubles have been mounting since last year, amid a sectorwide liquidity crunch sparked by a government crackdown on excessive borrowing and housing speculation that has sent defaults to a record.

The developer’s public relations department declined to comment. A spokesman for UOB also declined to comment.

Shimao, whose landmark projects included five-star hotels in Shanghai, was once considered largely immune to the sweeping crackdown that has engulfed larger peers like China Evergrande Group and Sunac China Holdings. But it now faces challenges from several creditor groups.

Documents laying out the terms of the loan facilities included a so-called share charge – a kind of pledge – for another subsidiary Genuine Victory Holding’s 100 per cent holding in Adventure Success, according to the writ.

UOB alleged that the reallocation of inter-company loans, as well as allotment of shares that occurred on or around May 26 this year, led to Genuine Victory’s holding in Adventure Success being reduced to about 5.4 per cent from 100 per cent.

The bank demanded that the reallocation and the allotment of the shares be set aside, among other claims.