At the epicenter of the country’s property crisis, Hui Ka Yan, the founder of China Evergrande Group, has been put under police control, suggesting the firm may have entered a new phase involving the criminal justice system. The move casts doubt on the fate of the world’s most indebted developer after recent setbacks to its restructuring plan roiled financial markets and raised the risk of a liquidation.

The 64-year-old billionaire, whose ambitions once ranged from electric cars to soccer, is the highest-profile casualty of President Xi Jinping’s crackdown on excessive leverage and speculation within the real estate sector. He was once regarded as one of the country’s most politically connected business people, with a net worth of $42 billion at its peak in 2017. But his fortune has shrunk to $1.8 billion, and his once prominent position as Asia’s second-richest person is now a distant memory as Evergrande struggles to repay its 2.39 trillion yuan ($328 billion) debt load.

According to a source close to the matter, Yan has been told by police that he can’t leave his residence without approval and must surrender his passport and identification cards to authorities. While he’s not under arrest or formal detention, his residential surveillance could last for up to six months, based on Chinese law.

• Read also: Netflix: Transforming Entertainment Through Streaming Innovation

The decision to place him under police control comes after Evergrande roiled investors recently when it scrapped a critical creditor meeting and said it can’t issue new bonds as part of its proposed debt restructuring. It also disclosed that its mainland China unit, Hengda Real Estate, has defaulted on a local bond. The company’s share prices slumped 19% on Wednesday.

Brock Silvers, managing director at Kaiyuan Capital in Hong Kong, believes the restriction of new notes will have a limited impact on Evergrande’s debt restructuring. He says the company can still issue new bonds if it has sufficient cash and that the market needs to be fully aware of the full details behind the restrictions. “In the long run, what is important is if Evergrande’s friendly offshore creditors can agree on an agreement with them,” he says. “If they do, it is unlikely that the hostile ones will file for a winding-up petition in Hong Kong on October 30.”

In addition to being placed under surveillance, police are also investigating alleged misconduct by officials and employees of the company, Reuters reports. A separate report by Caixin suggests that officials have detained staff from the company’s wealth management unit, including two former executives. The news agency said whether the officials are related to Hui is unclear. The latest development also adds to the already-increasing uncertainty about the company’s future, as it seeks to reassure investors that it has enough funds to repay its debt and to pay suppliers and creditors. It will be difficult for the company to do that if it’s under investigation by authorities and can’t issue new bonds required for companies to meet liquidity requirements.