PHOTO: Evergrande founder Hui Ka Yan’s real estate empire is one of the biggest victims of Chinese President Xi Jinping’s efforts to rein in debt-fuelled acquisitions and scale back risk in China’s property market [File: Bloomberg]

Four years after vying with Jack Ma for the title of Asia’s richest man, Evergrande chairman Hui Ka Yan’s fortune is plunging and his sprawling real estate empire is on the verge of collapse.

Evergrande Group

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It’s a stunning reversal for a man who fought his way from poverty in rural China to build one of the world’s largest property companies. In previous times of trouble, Hui had been able to rely on the help of his tycoon friends and local government support. This time, with $305 billion in liabilities and the company’s asset prices plunging, Hui appears more alone than ever.


“There’s no interest to bail him out,” said Desmond Shum, whose book about his dealings with China’s political elites, “Red Roulette,” described how he once went shopping with Hui for a superyacht. “In the situation he’s in now, I don’t think any political connections will come to his rescue.”

What happens to Hui is open to question, including whether he will retain ownership of his empire. One of his allies and fellow billionaire Zhang Jindong lost control of the retail arm of his Suning conglomerate when it received a state-backed bailout in July – partly because he helped Hui out during a tight spot. Other heads of failed companies have met with worse fates, from arrest to execution.

Hui’s empire is turning into one of the biggest victims of President Xi Jinping’s efforts to curb the debt-fueled excesses of conglomerates and defuse risks in the nation’s housing market. Evergrande and its affiliated companies were built through an aggressive mix of dollar debt issuance, share sales, bank loans and shadow financing – funding avenues that have been all but cut off. The group now faces at the minimum a debt restructuring, which could be China’s largest ever.

Even his long-term backers may be losing patience. Chinese Estates Holdings Ltd., controlled by the family of property mogul and fellow poker pal Joseph Lau, has been selling Evergrande stock and said it could unload its entire stake.

Hui remains in charge of the group and was seen publicly at the Communist Party’s 100th anniversary celebration in Tiananmen Square in July, illustrating the power of his political connections. He met with employees last month, and signed a public statement emphasizing the importance of finishing construction of sold properties.