Breaking News
Get 40% Off 0
Is NVDA a 🟢 buy or 🔴 sell? Unlock Now

China Evergrande's billionaire boss goes from power circles to criminal investigation

Published Sep 27, 2023 05:09AM ET Updated Sep 28, 2023 09:41AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: Hui Ka Yan, chairman of Evergrande Real Estate Group Ltd, the country's second-largest property developer by sales, attends a news conference on annual results in Hong Kong, China March 29, 2016. REUTERS/Bobby Yip/File photo 2/2
 
3333
0.00%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Clare Jim

HONG KONG (Reuters) - Mingling with power brokers at celebrations to mark the centenary of the Chinese Communist Party on July 1, 2021, a beaming Hui Ka Yan showed no signs that his company, China Evergrande (HK:3333) Group, was facing mounting pressure paying its debts.

Hui, wearing a navy-blue suit and open-neck shirt, looked relaxed as he stood on a podium overlooking the festivities in Tiananmen Square, an invitation many considered an official show of support for the billionaire businessman.

A month earlier, the Evergrande group chairman had hosted a rare meeting with more than 1,000 suppliers and was once again flanked by the business elite, as he spoke of his debt deleveraging goals.

Just two years later, Hui, who founded Evergrande in 1996 in the southern city of Guangzhou, is under investigation over suspected "illegal crimes", the group said on Thursday, and his property empire is under growing risk of liquidation.

Evergrande's total liabilities stand at more than $300 billion, roughly the size of Finland's gross domestic product, and the world's most indebted developer's troubles took a rapid turn for the worse this week.

The company, which has been seeking creditor approval for an offshore debt restructuring plan, said on Sunday it was unable to issue new debt due to an investigation into its main China unit, further complicating its revamp proposal.

Reuters reported on Tuesday that a major Evergrande offshore creditor group was planning to join a liquidation court petition filed against the developer if it does not submit a new debt revamp plan by the end of October.

The 64-year-old former steel technician, raised by his grandmother in a rural village in central Henan province, built his fortune on the back of low-priced homes.

Under Hui, the property developer expanded aggressively by raising loans to support its land-buying sprees and selling homes at lower margins for quick turnover. Evergrande grew to achieve 700 billion yuan ($95.8 billion) in annual sales by 2020.

In 2017, Hui was Asia's richest man with a net worth of $45.3 billion, according to Forbes. Today his net worth is estimated at $3.2 billion.

Hui was known for keeping a low public profile and being a workaholic, who at times demanded that others followed his work style, three employees told Reuters.

He also set ambitious targets; when questioned by investors and reporters in the past decade about his highly leveraged projects, Hui said that Evergrande's high turnover and asset value were sufficient to cover its debts.

POKER PALS

Hui did not shy away from new ventures, especially in support of China's larger goals. He dabbled in electric cars and soccer, both a passion of Chinese President Xi Jinping.

Outside mainland China, Hui mixed with Hong Kong tycoons. With them, he became a core member of the "poker club", a tight-knit circle of tycoons who often did investment deals together, according to three people familiar with the club.

"He was very composed when he was first brought to the club; he knowingly lost a lot of money in the games and gained the fondness of Cheng," one of the people briefed by the tycoons said, referring to the late founder of Hong Kong property developer New World Development, Cheng Yu Tung.

Cheng injected $150 million into Evergrande a year before its 2009 IPO in Hong Kong, according to Evergrande's listing prospectus, helping it through a crunch during the financial crisis following its aggressive expansion.

Hui's debt-laden businesses worried regulators who had warned Evergrande to get its house in order amid fears of contagion.

Speaking at the 2018 China Charity Awards as a winner for the eighth consecutive year, Hui said Evergrande had paid tax totalling 185 billion yuan in the past 22 years and donated more than 10 billion yuan.

"Without the country's policy to reform higher education, I could not have left the village. Without the country giving me a scholarship of 14 yuan every month, I could not have completed university," Hui said.

"Without the country's good policy to reform and open up, Evergrande would not have what it has today. Therefore, everything that Evergrande and I have, they are all given by the Party, by the country, and by society."

($1 = 7.3085 Chinese yuan renminbi)

China Evergrande's billionaire boss goes from power circles to criminal investigation
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Otis Grant
Otis Grant Sep 27, 2023 5:43AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Much like the party, Evergrande is rotten to the core
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email