Hui Ka Yan, the founder of China Evergrande, once hailed as one of China’s wealthiest individuals, is now facing an investigation by authorities for suspected criminal behavior. Hui’s rise to success, from a poverty-stricken village boy to a property magnate, symbolized the promise of China’s economic growth. Evergrande, under Hui’s leadership, attracted buyers with the promise of transforming rural areas into urbanized communities offering middle-class comforts. However, signs of trouble emerged in 2020 when China’s property market started to cool, and the Covid-19 pandemic further dampened the demand for homes. In 2021, Evergrande defaulted on payments to creditors, accumulating over $300 billion in debt.
Hui’s fall from grace can be attributed to Evergrande’s aggressive expansion fueled by heavy borrowing. The company took out loans from banks and even its own employees, eventually accumulating more debt than it could repay. Hui, once part of an elite group of Chinese political advisers, saw his company’s stocks plummet amid concerns about its ability to fulfill its obligations and complete construction projects. Homebuyers took to the streets in protest, and the Chinese central bank urged Evergrande to address its debt issues. As a result, the company has struggled to sell off assets to raise funds. Hui’s estimated wealth has dramatically decreased, dropping from $43.8 billion to $3 billion in 2023.
The investigation into Hui Ka Yan has raised questions about the future of Evergrande. The company has suspended the trading of its shares as it negotiates with creditors and has provided minimal information about the situation. Chinese officials have remained silent on the matter, leaving many to speculate about the outcome of the investigation and its implications for Evergrande’s operations. Despite the uncertainty surrounding the company, Evergrande has applied for trading to resume in its main holding company and property services unit, suggesting that operations at the latter are relatively normal. The fate of Evergrande and its founder now hangs in the balance as they navigate through this tumultuous period.