Its mainland unit Hengda Real Estate has defaulted on 4 billion yuan (£449m; $547m) of debt, it revealed on Monday.
Beijing-based news outlet Caixin has also reported that several current and former Evergrande executives have been detained by authorities.
Former chief executive Xia Haijun and an ex-finance boss Pan Darong were among those held, Caixin said.
The BBC has been unable to independently confirm Caixinʼs reporting. Evergrande did not immediately respond to a request for comment from the BBC.
Its share price fall on Tuesday followed an even sharper decline the previous day. Evergrandeʼs stock has fallen by more than 25% this week.
In a statement to the Hong Kong Stock Exchange on Sunday, Evergrande said it was unable to sell new debt as part of its restructuring plan because Hengda was being investigated by authorities.
Earlier this month, members of staff at Evergrandeʼs wealth management unit were detained by police in Shenzhen, southern China.
In a post on social media police called on the public to report any cases of suspected fraud.
In the week prior to that, authorities announced that Evergrandeʼs insurance arm would be taken over by a newly created state-owned insurer.
Is Chinaʼs economy a ʼticking time bombʼ?
"The latest news will likely make it more challenging for Evergrande to pull off its restructuring," Eveline Danubrata from REDD Intelligence Asia told the BBC.
Evergrande also faces a court hearing in Hong Kong on a winding-up petition which could potentially force it into liquidation. The hearing, which was scheduled for July, is now due to take place on 30 October.
"Creditors may think twice about approving a restructuring proposal that includes a repayment plan over a long period of time if theyʼre concerned about the companyʼs ability to survive," Ms Danubrata said.
With more than $300bn (£246bn) of debts, Evergrande has been at the centre of Chinaʼs property debt crisis. Several major developers have defaulted over the past year.
Most of Evergrandeʼs debt is owed to people within China, many of whom are ordinary citizens whose homes have not been finished.
These onshore debts are large, but the company has significant flexibility in renegotiating how long it has to make the repayments.
In terms of survival, its big concern is the$31bn owed to creditors outside of China who bought bonds from Evergrande.
Evergrande defaulted on its debts two years ago and has been working on a new repayment plan ever since.
The company seemed to be moving closer to resolving the problem after it filed for US bankruptcy protection in August.
Its latest plan was to reissue its overseas debt as new bonds that it had to pay back in about 10 yearsʼ time, as well as offering their creditors stakes in the company as shares.