Evergrande: The rise and fall of the property giant’s billionaire founder

Hui Ka Yan, the founder and chairman of Chinese property big Evergrande, was as soon as Asia’s richest particular person.

The 64-year-old, who’s also referred to as Xu Jiayin, rose from a humble upbringing to go an unlimited enterprise empire. His fortune was estimated at $42.5bn (£34.8bn) when he topped the record of Asia’s wealthiest folks compiled by Forbes journal in 2017.

Now he’s being investigated over suspected “illegal crimes” as his firm teeters below the weight of $300bn (£245.4bn) of debt.

Mr Hui was raised by his grandmother in a village in central Henan province after his mom died of sepsis when he was simply eight months previous.

After graduating from college in 1982, he spent the subsequent decade working as a metal technician earlier than changing into a salesman for a property developer in the metropolis of Guangzhou in southern China. It was there that he based Evergrande in 1996.

The firm expanded quickly as China’s economic system boomed by borrowing massive quantities of cash.

“He was an example of how anybody can become rich if you’re smart enough and if you work hard enough,” stated Alicia Garcia Herrero, the chief economist for Asia-Pacific at French funding financial institution Natixis.

Mr Hui, who has been a Communist Party member for greater than three a long time, was elected in 2008 as a member of the Chinese People’s Political Consultative Conference. The elite group of authorities officers and enterprise leaders is the nation’s prime advisory physique.

{A photograph} of him at a celebration convention sporting a gold-buckled belt made by the French luxurious label Hermès went viral on social media in 2012, incomes him the nickname “belt brother”.

A quickly increasing Evergrande raised $9bn in its 2009 Hong Kong inventory market itemizing.

That progress was then turbo-charged by Mr Hui’s “maximum leverage” strategy, in response to Jackson Chan from monetary markets analysis platform Bondsupermart.

“Evergrande grew fast but even faster after he [Mr Hui] made friends with a group of [the] richest real estate tycoons in Hong Kong and the company was listed on Hong Kong Stock Exchange,” Mr Chan says.

“He received numerous support from these friends as they bought a lot of Evergrande’s stocks and bonds to help the company grow.”

Evergrande’s enterprise mannequin was to borrow massive sums and then aggressively promote residences that had not even been constructed. The group’s actual property unit at present has greater than 1,300 tasks in additional than 280 cities in the nation, according to its website.

Mr Hui’s enterprise empire grew to embody way over simply property and now contains operations together with wealth administration, electrical automobile making and meals and drink manufacturing.

It additionally has a majority stake in what was as soon as China’s prime soccer workforce, Guangzhou FC.

In 2020, Beijing introduced in new guidelines to regulate the quantity of cash owed by huge actual property builders.

The new measures led Evergrande to supply its properties at main reductions in an try and preserve the enterprise afloat. But it’s now struggling to pay its money owed.

The disaster has seen its inventory market valuation shrink by 99% and Mr Hui’s fortune plummet to $3.2bn.

Mr Hui is “the symbol of extreme wealth especially with his flamboyant lifestyle, flying around the world in his private jet,” Dexter Roberts, Director of China affairs at the Mansfield Center at the University of Montana, advised the BBC.

“Xi has made it clear that extreme wealth, especially when displayed publicly like Hui, isn’t good for the economy and the society,” Mr Roberts stated, including that Mr Hui was “seen as a natural target”.

Although there was no official assertion but on the investigation of Mr Hui, an opinion piece in the state-run Global Times newspaper indicated that the pursuits of strange residents have been being prioritised.

“Minimising homebuyers’ losses at all costs should be the next biggest consideration in dealing with the Evergrande crisis,” Hu Xijin, the paper’s former chief editor wrote.

“We should deal with the matter strictly and in accordance with the law, keep the public informed, and look at how to support the company’s customers as much as possible,” he added.