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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 Group, was facing mounting pressure paying its debts.<\/p>\n
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.<\/p>\n
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China Evergrande founder and chairperson Hui Ka Yan is under investigation over suspected \u201cillegal crimes\u201d, the group announced.<\/span>Credit: <\/span>Bloomberg<\/cite><\/p>\n A month earlier, the Evergrande group chairman had hosted a rare meeting with more than 1000 suppliers and was once again flanked by the business elite, as he spoke of his debt deleveraging goals.<\/p>\n Just two years later, Hui, who founded Evergrande in 1996 in the southern city of Guangzhou, is under investigation over suspected \u201cillegal crimes\u201d, the group said on Thursday, and his property empire is under growing risk of liquidation.<\/p>\n Evergrande\u2019s total liabilities stand at more than $US300 billion ($467 billion), roughly the size of Finland\u2019s gross domestic product, and the world\u2019s most indebted developer\u2019s troubles took a rapid turn for the worse this week.<\/p>\n 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.<\/p>\n 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.<\/p>\n 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.<\/p>\n 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 ($149 billion) in annual sales by 2020.<\/p>\n In 2017, Hui was Asia\u2019s richest man with a net worth of $US45.3 billion, according to Forbes. Today his net worth is estimated at $US3.2 billion.<\/p>\n Hui\u2019s debt-laden businesses worried regulators who had warned Evergrande to get its house in order amid fears of contagion.<\/p>\n 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.<\/p>\n He also set ambitious targets; when questioned by investors and reporters in the past decade about his highly leveraged projects, Hui said that Evergrande\u2019s high turnover and asset value were sufficient to cover its debts.<\/p>\n Hui did not shy away from new ventures, especially in support of China\u2019s larger goals. He dabbled in electric cars and soccer, both a passion of Chinese President Xi Jinping.<\/p>\n Outside mainland China, Hui mixed with Hong Kong tycoons. With them, he became a core member of the \u201cpoker club\u201d, a tight-knit circle of tycoons who often did investment deals together, according to three people familiar with the club.<\/p>\n \u201cHe 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,\u201d 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.<\/p>\n Things are going from bad to worse for China Evergrande.<\/span>Credit: <\/span>Bloomberg<\/cite><\/p>\n Cheng injected $US150 million into Evergrande a year before its 2009 IPO in Hong Kong, according to Evergrande\u2019s listing prospectus, helping it through a crunch during the financial crisis following its aggressive expansion.<\/p>\n Hui\u2019s debt-laden businesses worried regulators who had warned Evergrande to get its house in order amid fears of contagion.<\/p>\n 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.<\/p>\n \u201cWithout the country\u2019s 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,\u201d Hui said.<\/p>\n \u201cWithout the country\u2019s 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.\u201d<\/p>\n<\/p>\n