Hui Ka Yan, founder and chairman of Evergrande, one of China’s largest property companies, was once the richest person in Asia.
The 64-year-old businessman is also known as Xu Jiayin. Born in a modest family, Shu later took command of a huge business empire.
In 2017, when Forbes magazine declared him the richest person in Asia, his wealth was estimated at $42.5 billion.
Now his company has a debt of 300 billion dollars and his company is being investigated for suspected criminal activities.
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Hui Ka Yan was born in the year 1958 in a poor family. His childhood was influenced by Chinese leader Mao Zedong’s policy of rapidly industrializing China’s agriculture-based economy. Because of this policy, tens of millions of people died in the famine in China.
Hui Ka Yan was only eight months old when his mother died due to illness. His grandfather raised him in a village in China’s central province of Henan.
After graduating from university in 1982, he worked as a steel technician for the next decade and then as a salesman for a real estate property developer in Guangzhou, southern China. It was here that he established Evergrande in 1996.
During this period, China’s economy was growing rapidly. The company took huge loans and grew at a very fast pace.
“He was an example of how anyone who works hard and is smart can succeed,” says Alicia Garcia Herrero, chief economist at French investment bank Natixis.
Hui Ka Yan became a member of the party’s political advisory conference in 2008 after being a member of the Communist Party of China for three decades. In China, this exclusive group of government officials and business leaders is also the top advisory body in the country.
In 2012, a picture of him at a party conference also went viral in which he was seen wearing a buckle belt made by French luxury brand Hermès. The buckle of this belt was of gold and he was also called ‘Belt Brother’ on social media.
In 2009, Evergrande was listed on the Hong Kong stock market and this rapidly growing company raised nine billion dollars.
According to Jackson Chan of financial markets research platform Bond Supermarket, Hui’s approach of “maximizing profits” helped fuel his company’s growth.
“Evergrande was growing rapidly, but when Hui befriended some of the biggest real estate entrepreneurs and listed the company on the Hong Kong Stock Exchange, its growth exploded,” says Chan.
“He got a lot of help from these friends. “They bought Evergrande stocks in large numbers and this helped the company grow.”
Evergrande took huge loans, built a large number of houses and even sold apartments that the company had not built. At present, Evergrande has more than 1300 real estate projects running in 280 cities of China.
Hui’s business empire is not limited to the property sector only, but his company also does wealth management, electric car production, food and beverage production.
The company also had a stake in Guangzhou FC, once China’s biggest football club.
In 2020, China made new rules to control how much funds real estate developer companies can hold.
After the new rules, the company was forced to sell its assets at a huge discount to continue its business. But now the company is struggling to repay its loan.
In this economic crisis, the market value of the company has fallen by 99 percent and Hui’s wealth has reduced to only 3.2 billion dollars.
Evergrande has stopped trading on the Hong Kong Stock Exchange. Hui has joined the list of people who are being investigated by the Chinese government.
Many experts also see a connection between Chinese President Xi Jinping’s Common Prosperity program and the crackdown on China’s wealthy elite. The aim of this policy of President Jinping is to reduce economic inequality.
“Hui is a symbol of extreme wealth because of his luxury and extravagant lifestyle,” says Dexter Roberts, director of China affairs at the Mansfield Center at the University of Montana. He travels around the world in his private jet.”
“Xi Jinping has made it clear that public displays of wealth, as Hui has done, are not good for the country’s economy and society,” says Roberts.
Roberts believes Hui was a natural target.
Although the Chinese government has not yet made any official comment on the investigation against Hui, an article published in China’s official newspaper Global Times said that the prosperity of the common people in the country is being given priority.
The newspaper’s former editor-in-chief, Hu Shijin, wrote, “The next step in dealing with the Evergrande crisis should be to reduce the losses of homebuyers at any cost.”
“We must deal with this matter vigorously and in accordance with the law, keep the public informed, and look at how best to support the company’s customers,” he wrote.