By Clare Jim
HONG KONG, April 14 (Reuters) – Mingling with power brokers at centenary celebrations of the Chinese Communist Party on July 1, 2021, a beaming Hui Ka Yan betrayed no sign of the pressure mounting on his property company, China Evergrande Group, the world’s most indebted.
Hui looked relaxed in navy-blue suit and open-necked shirt 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.
Flanked by the business elite, the founder of Evergrande, started in 1996 in the southern city of Guangzhou, spoke of his debt deleveraging goals, just a month after having outlined them in a rare meeting with more than 1,000 suppliers.
Now, nearly five years later, with Evergrande in liquidation over total liabilities of more than $300 billion, roughly the equivalent of Finland’s gross domestic product, Hui, 67, has pleaded guilty to charges such as fundraising fraud and bribery.
His plea, after three years spent in detention, draws a line under the collapse of an empire that thrust China’s property sector into the glare of global investors.
The liquidators of Evergrande, appointed by a Hong Kong court, declined to comment. Reuters was unable to seek comment from Hui. The municipal government of the southern hub of Shenzhen did not respond to a Reuters request for comment.
Hui, a former steel technician, raised by his grandmother in a rural village in the central province of Henan, built his fortune on the back of low-priced homes.
Under him, 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 ($103 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. By 2023, his net worth was estimated at $3 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 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 passions of Chinese President Xi Jinping.
Outside mainland China, Hui mixed with Hong Kong tycoons, becoming a core member of the “poker club”, a tight-knit circle that often did investment deals together, said three people familiar with it.
“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,” said one of the sources, referring to Cheng Yu Tung, the late founder of the New World Development group.
Cheng injected $150 million into Evergrande a year before its Hong Kong IPO in 2009, according to Evergrande’s listing prospectus, helping it through a crunch during the financial crisis in the wake of its aggressive expansion.
Hui’s debt-laden businesses worried regulators who had warned Evergrande to get its house in order for fear of contagion.
Speaking at the 2018 China Charity Awards as a winner for an 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 become 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=6.8171 Chinese yuan)
(Reporting by Clare Jim; Editing by Anne Marie Roantree and Clarence Fernandez)
Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibility for its content.