Evergrande shares fall as its mainland affiliate fails to make a debt payment.

Shares in Chinese company Evergrande have slumped as the real estate developer's crisis deepened.

Its mainland unit Hengda Real Estate has defaulted on 4 billion yuan (449 million pounds; $547 million) of debts, it was announced on Monday.

Beijing-based news agency Caixin also reported that authorities had arrested several current and former Evergrande executives.

Former CEO Xia Haijun and former finance chief Pan Darong are among those detained, Caixin said.

The BBC could not independently confirm Caixin's reports.Evergrande did not immediately respond to a BBC request for comment.

Tuesday's drop in the stock price followed an even steeper drop the day before. Evergrande shares have fallen more than 25% this week.

In a statement to the Hong Kong Stock Exchange on Sunday, Evergrande said it could not sell new debt as part of its restructuring plan because authorities were investigating Hengda.

Earlier this month, employees of Evergrande's asset management unit were arrested by police in Shenzhen, southern China.

In a social media post, police urged the public to report any suspected fraud.

Last week, authorities announced that Evergrande's insurance division would be taken over by a newly founded state insurer.

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“The latest news is likely to make it harder for Evergrande to carry out its restructuring,” Eveline Danubrata of REDD Intelligence Asia told the BBC.

Evergrande is also facing a court hearing in Hong Kong over a liquidation application that could force the company into liquidation.The hearing scheduled for July will now take place on October 30th.

“Creditors may think twice before agreeing to a restructuring proposal that includes a repayment plan over a longer period of time if they are concerned about the viability of the business,” Ms. Danubrata said.

With debts of over $300 billion (£246 billion), Evergrande has been at the center of China's property debt crisis. Several major developers defaulted on payments last year.

Most of Evergrande's debt is owed to people in China, many of whom are ordinary citizens whose homes are not yet finished.

These internal debts are high, but the company has significant flexibility in renegotiating the payment term.

In terms of survival, their biggest concern is the $31 billion they owe to creditors outside China who bought Evergrande bonds.

Evergrande defaulted on payments two years ago and has been working on a new payment plan ever since.

The company appeared to be moving closer to resolving the problem after filing for bankruptcy in the United States in August.

His most recent plan was to reissue his foreign debt in the form of new bonds, which he would have to repay in about ten years, and to additionally offer his creditors a stake in the company in the form of shares.

However, recent problems have raised serious doubts about its recovery plan.