Hui Ka Yan, the billionaire founder of China Evergrande, is facing an investigation by authorities for suspected criminal behavior. Hui’s rise from an impoverished village boy to a real estate magnate once symbolized the promise of China’s economic growth. Evergrande became a powerhouse in the Chinese property market, with buyers eagerly purchasing apartments before they were even completed. However, signs of trouble emerged in 2020 when China’s property market began to cool, and the Covid-19 pandemic further dampened demand for homes. Evergrande eventually defaulted on payments to creditors, accumulating more than $300 billion in debt.
Hui’s fall from grace is a stark contrast to his previous status as one of China’s wealthiest individuals. He filed for bankruptcy protection in New York in August in an attempt to ease the settlement of debts with overseas bondholders. In a statement to the Hong Kong Stock Exchange, Evergrande confirmed that Hui was under investigation for criminal wrongdoing. The company’s debts and financial woes have led to protests by home buyers and scrutiny from China’s central bank. Hui’s estimated wealth has plummeted from $43.8 billion to $3 billion. Despite the investigation, Chinese officials have not made any public statements about Hui’s case.
Evergrande’s situation is also impacting its operations. The company has suspended trading of its shares and is actively negotiating with creditors. It recently applied for trading to resume in the shares of its main holding company and property services unit. Although Evergrande stated that the property services unit’s operations are “normal,” it did not provide updates on the main holding company’s business status. The company’s future remains uncertain as it grapples with its massive debt burden and ongoing investigations.
