Evergrande: The rise and fall of the billionaire founder of the real estate conglomerate
Asia's richest man at one point was Hui Ka Yan, founder and chairman of the Chinese real estate firm Evergrande.
The 64-year-old, also known as Xu Jiayin, emerged from a modest background to control a vast economic empire. When he tops the list of Asia's wealthiest people compiled by Forbes magazine in 2017, his net worth was estimated to be $42.5 billion (£34.8 billion).
He is currently under investigation for alleged "illegal crimes" as his company quakes under the weight of $300 billion (£245.4 billion) in debt.
Hui Ka Yan: who is she?
His early years were influenced by the Great Leap Forward, Mao Zedong's drive to quickly industrialize a Chinese economy dependent on agriculture that resulted in a famine that claimed millions of lives. He was born in 1958 into a low-income rural household.
After his mother passed away from sepsis when he was only eight months old, Mr. Hui was raised by his grandmother in a village in northern Henan province.
Following his graduation from college in 1982, he spent the following ten years working as a steel mechanic before starting a sales career for a real estate developer in the southern Chinese city of Guangzhou. In 1996, he established Evergrande there.
As China's economy grew, the corporation quickly expanded by taking on significant debt.
He served as an illustration of how anyone can achieve wealth if they are intelligent and persistent enough, according to Alicia Garcia Herrero, chief economist for Asia-Pacific at French investment firm Natixis.
The Chinese People's Political Consultative Conference chose Mr. Hui, a member of the Communist Party for more than 30 years, in 2008. The nation's top advisory body is an exclusive gathering of senior government officials and business executives.
He gained the moniker "belt brother" after a picture of him attending a party conference in 2012 while sporting a gold-buckled belt from the French luxury brand Hermès went popular on social media.
explosive expansion
Evergrande raised $9 billion when it went public on the Hong Kong stock exchange in 2009.
Jackson Chan from the financial markets analysis website Bondsupermart claims that Mr. Hui's "maximum leverage" strategy then gave that growth a boost.
Evergrande expanded quickly, but even more so after Mr. Hui made connections with some of the wealthiest real estate magnates in Hong Kong and the business was listed on the Hong Kong Stock Exchange, according to Mr. Chan.
Chinese house purchasers who are concerned reel from the Evergrande crisis
What the world's economic issues with China mean
He received a lot of assistance from these pals, who invested heavily in Evergrande's stocks and bonds to spur the company's expansion.
Evergrande's business strategy involved taking out huge loans and then aggressively marketing unfinished properties. According to its website, the group's real estate division now has more than 1,300 projects in more than 280 cities around the nation.
More than only real estate, Mr. Hui's commercial empire has expanded to include wealth management, the production of electric vehicles, and the production of food and beverages.
Additionally, it owns a large portion of Guangzhou FC, the former top football team in China.
Downfall
Beijing implemented new regulations in 2020 to limit the amount of money that major real estate developers owe.
Evergrande offered its properties at steep discounts as a result of the new regulations in an effort to stay in business. But it is currently having trouble paying its bills.
Its stock market worth has decreased by 99% as a result of the crisis, and Mr. Hui's wealth has fallen to $3.2 billion.
The trade of Evergrande's shares in Hong Kong was halted as Mr. Hui, the newest billionaire in China, was under investigation by law enforcement.
Some observers believe that President Xi Jinping's Common Prosperity policy, which attempts to lessen economic disparity, and the official examination of China's wealthy elite are related events.
Mr. Hui is "the symbol of great wealth, especially with his flamboyant lifestyle, flying across the world in his private jet," Dexter Roberts, Coordinator of China Affairs at the Mansfield Foundation at the University of Montana, told the BBC.
Why is it important that Evergrande fails?
Mr. Roberts stated that Mr. Hui was "seen as a natural target" and that "Xi has made apparent that extreme wealth, especially when expressed publicly like Hui, isn't good for the economy and the society."
Despite the fact that Mr. Hui's probe has not yet received an official statement, an opinion piece published in the state-run Global Times daily suggested that regular individuals' concerns were being prioritized.
The paper's former top editor, Hu Xijin, argued that "minimizing homebuyers' losses at all costs should be the next biggest consideration in dealing with the Evergrande crisis."
"We should deal with the problem strictly and in accordance with the law, make the public informed, and look at how can help the company's customers as much as possible," he continued.
