It seems the year 2023 has really come with the sole purpose of hitting hard on the novel rich across the continents of the world. Less than a month after it was recorded that Elon Musk worth had reduced by $138Billion in December 2022 less than he was worth in January of 2022, it was reported that Africa’s popular billionaire, Samad Rabiu (a Nigerian) reportedly lost a whooping sum of $255m dollars in the first two weeks of 2023.
While the world is yet to fully recover and assimilate the significance of such losses from these two wealthy men, another Chinese billionaire, who was one of the country’s most wealthy and influential businessmen, has seen a 93 percent dip in his fortune.
Hui Ka Yan, the Chairman of China Evergrande Group was once worth $42 billion, which made him Asia’s second richest person. However, his wealth has declined to $3 billion, Bloomberg Billionaire Index showed.
Evergrande is the country’s most indebted developer with $300 billion in liabilities and has been at the heart of China’s real estate problems since 2021. To save his company, the billionaire also ended up selling his houses and private jets.
The company has about 200,000 employees, raked in more than $110 billion in sales in 2020 and owns more than 1,300 developments in more than 280 cities, the publication added. The company also failed to deliver its preliminary debt restructuring plan last year, stoking questions about its future.
An associate of Hui Ka Yan confirmed that the chairman of troubled China Evergrande Group recently put up a luxury house in Hong Kong for loan collateral as the billionaire and his property empire face an escalating debt crisis.
The property on Hong Kong Island’s Black’s Link trail, known for its wealthy communities and expansive views, was pledged to the local branch of China Construction Bank, documents from the city’s Land Registry showed. Market observers estimate the property’s value at HK$700 million ($90 million).
A person close to the matter disclosed to mediaafricatv.com overseas that the property was pledged under pressure from Evergrande’s creditors, which demanded additional security for the company’s private equity financing. Hong Kong-traded Evergrande is struggling to repay debts amounting to more than $300 billion, some of which it has defaulted on.
Hui, 62, resigned as chairman of Hengda Real Estate, a subsidiary that is responsible for property development in mainland China and contributed to 88% of Evergrande’s revenue last year. He will be succeeded by Zhao Changlong, a long-time lieutenant who also works as the onshore unit’s general manager. Hui remains chairman of Hong Kong-listed Evergrande, where his 76.7% stake gives him a fortune of $14.6 billion.
In a Wednesday stock exchange filing to regulators in Shanghai, Hengda says Hui is stepping down due to the company’s decision to abandon a plan to seek an A-share listing, and his departure won’t have any negative impact on Hengda’s management, daily operations or its ability to repay debt. Its Hong Kong-listed parent Evergrande didn’t respond to mediaafrica e-mailed requests for additional comment.
Still, the management reshuffle appeared to have hit investors’ already fragile confidence in Evergrande, especially as they are on the watch for any sign that may indicate a worsening in the parent company’s financial health. Evergrande plunged 4.3% on Tuesday, bringing this year’s share price loss to 73%, when Hui’s resignation was first revealed through a change in a filing with China’s National Enterprise Credit Information Publicity System.
In addition to his wealth declining, Mr Hui is also finding himself increasingly isolated politically, with the latest signal coming from the Chinese People’s Political Consultative Conference (CPPCC) an elite group, comprising government officials and the biggest names in the business.
The businessman had been part of CPPCC since 2008 and of its elite 300-member standing committee since 2013. However, he was told not to attend the annual convention December last year as his property empire became the biggest casualty of the nation’s credit crunch, reported Sydney Morning Herald. Not only that, he has now been excluded from the latest list of individuals who will form the CPPCC for the next five years.
“The CPPCC role is like an honorary reward that China gives to faithful business people to make contributions to the country. It’s not surprising at all that property tycoons like Hui, who created trouble in the property sector with their over-leveraging, are out of the list,” Willy Lam, an adjunct professor at the Chinese University of Hong Kong who has authored several books about Chinese politics told Bloomberg.
While responding to his sudden crash and downtrodden fall of his empire from the top “I believe we can complete our mission of delivery, repay various debts, eliminate the risks, and start a new chapter on survival, as long as all of our work together and never give up on resuming our construction, sales, as well as operations,” he had said.
The Bloomberg Billionaire Index as seen by mediaafricatv.com further showed that China’s five richest property tycoons also lost about $65 billion combined.
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