The detainment of Agile Property Holdings Ltd's founder that dragged down the builder's bonds is fueling concern that more developer debt is vulnerable amid China's mounting corruption probes.

Agile's perpetual notes have lost 20 percent since Oct 3, when trading in the company's shares was suspended after Chairman Chen Zhuolin was confined by prosecutors. Authorities in the northern city of Handan, Hebei province, sent teams into 13 developers after a failure to repay funds raised illegally from the public sparked panic and owners of some of the companies fled, according to reports last month from the official Xinhua News Agency and China National Radio.

Zhejiang Xingrun Real Estate Co, a closely held developer near Shanghai, collapsed in March and authorities detained its largest shareholder and his son.

The country's crackdown on graft is adding to speculation that more property executives may face probes as the industry grapples with sliding sales.

Real estate has been "heavily hit" by corruption, Xinhua reported on Oct 13. That issue is fueling concern among bond investors overseas, as China's developers make up the biggest component of Bank of America Merrill Lynch's index for high-yield dollar notes in Asia, which is used as a benchmark.

"Investors may likely wonder if similar situations could happen to other developers," said Kaven Tsang, senior analyst at Moody's Investors Service in Hong Kong.

Agile's billionaire founder and chairman Chen was placed under the control of prosecutors last month. Chen's wife told Agile that Chen had been confined at a "designated residence" since the evening of Sept 30 by prosecutors in Kunming, Yunnan province, according to a company filing.

The builder said it did not have any evidence at the moment that Chen's detention was related to "any lost or misappropriation of funds or assets".

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