[The Epoch Times, July 2, 2022](Comprehensive report by Xu Yiyang, a reporter from the Epoch Times Special Department) Leading Chinese real estate companiesEvergrandeGroup ChairmanXu JiayinIncredible things happened one after another. On June 28, China Evergrande announced that an offshore company had filed a lawsuit against Evergrande with the Hong Kong High Court.winding up petitionthe amount of claims involving the company is HK$862.5 million (approximately US$110 million).
ChinaEvergrandeAn inside information announcement was issued on June 28, in response to the petitioner’s filing against Evergrande in the Hong Kong High Court the previous daywinding up petitionThe company will vigorously oppose the petition.
Evergrande said in the announcement that it is expected that the petition will not affect the company’s restructuring plan or timetable. At present, Evergrande has been actively communicating with creditors to promote overseas debt restructuring. It is expected to announce the preliminary plan for overseas debt restructuring before the end of July.
The announcement also said that if Evergrande is eventually wound up as a result of the petition, a transfer of the company’s shares made on or after June 24 will be invalid without a High Court recognition order.
The winding-up petitioner was an entity registered in the Pacific Samoa Islands. On June 27, the Hong Kong High Court website updated the court log to show that Top Shine Global Limited of Intershore Consult (Samoa) Limited had submitted a petition to the Hong Kong High Court for the winding-up of China Evergrande Group. The case is tentatively scheduled for a court hearing on August 31, 2022 at 9:30 a.m.
A “winding-up petition” means that a company’s creditors and/or members of the company can file a winding-up petition in court if the company has too much debt. After the winding-up petition is filed, the court will conduct a winding-up petition hearing. If the winding-up petition is approved, the court will issue a compulsory winding-up order, ordering the company to sell its assets to repay its debts and distribute the remaining property.
A legal professional told a reporter from the Securities Times e Company, an information platform for Chinese listed companies, that a creditor’s winding-up petition is more intense than an ordinary debt lawsuit, because it is based on the disapproval of the company’s overall solvency, and the direct appeal is similar to Debt repayment by applying to a Chinese court for bankruptcy liquidation.
Up to now, Evergrande has officially defaulted on 13 dollar bonds totaling approximately US$19.285 billion.
According to Evergrande’s latest 2021 interim report, as of June 2021, Evergrande had a total debt of 2,305.297 billion yuan (RMB, the same below, about US$344.1 billion), with a debt ratio of 82.71%.
October 2021,Xu JiayinZeng made a high-profile statement that he would never sell land at a low price. Under this principle, Evergrande has been quite slow in processing assets. Up to now, China Evergrande has announced only four sale projects. Excluding the repayment of the original debts of the projects, the total revenue is less than 2.4 billion yuan (about 358 million US dollars).
Since the outbreak of the debt crisis and the struggle for half a year, the stock price has plummeted, and the 2021 annual report has been announced to be suspended on the eve of the publication. Evergrande’s property, which had the opportunity to be priced at 20.04 billion Hong Kong dollars (about 2.554 billion U.S. dollars), has also failed to be sold. With the petition for winding up, Evergrande has always been in a crisis.
Lien family resurfaces
According to Evergrande’s announcement, the petitioner’s representative is Lian Haomin. The relationship between Evergrande and the petitioner can be traced back to a year ago.
RV Bao is a real estate and auto trading platform under Evergrande. In March 2021, Evergrande conducted a round of pre-IPO financing for Fangchebao, selling a total of 10% of the equity in Fangchebao to 17 investors, raising HK$16.35 billion (approximately US$2.084 billion). Investors include Lian Haomin. Through two offshore holding entities, he spent HK$1.5 billion (about US$190 million) to subscribe for a 0.918% stake in RV Bao.
At that time, the two parties agreed that if the RV treasure has not been listed for one year after the investor’s investment, Evergrande will redeem it at 1.15 times the principal. Now that the deadline has passed, and the RV treasure has not yet been listed, it is obvious that Evergrande cannot perform the contract under the current situation.
Relevant information shows that Lian Haomin is only 29 years old, but he has a lot of titles. He is the founder of “Dasheng Group”, a large group holding company, and the chairman of “Yongzhuo Yufu International Co., Ltd.”, whose main business is overseas real estate investment. In addition to the above positions, Lian Haomin is also a member of the All-China Youth Federation and holds 11 positions in relevant departments in Hong Kong, Jiangsu and other places.
It was this company named Yongzhuo Yufu that revealed Lian Haomin’s identity secret: Yongzhuo Yufu is the “high seas of Chaoshan”.Gambler“One of the capital platforms of the Lian family. The core member of the Lian family is 53-year-old Lian Zhuozhao, also known as Lian Chao.
Two Hong Kong people familiar with the matter told Chinese media Caixin that Lian Haomin was Lian Zhuo-zhao’s son. However, Caixin reporters were unable to obtain confirmation from Lian.
Caixin reported that Lian Zhuozhao was the founder of Hong Kong Neptune International Investment Co., Ltd. He has a history of both black and white. He was involved in Hong Kong gangs in his early years. After that, he worked in the gaming industry. He was involved in the cases of Huang Guangyu, the founder of Gome, Zheng Shaodong, the former assistant minister of the Ministry of Public Security of the Communist Party of China, and Chen Shaoji, the former chairman of the Guangdong Provincial Political Consultative Conference. In recent years, Lai Xiaomin, the former chairman of China Huarong Asset Management Co., Ltd., also has Lian Zhuozhao.
In 2008, Lian Zhuozhao was detained for his involvement in the Huang Guangyu case, and he returned to Hong Kong as a free person, and has been in hiding since then. But the Lian family has not disappeared, and has been quietly developing business in the mainland for many years, setting up dozens of companies one after another, setting foot in the real estate and financial fields.
Evergrande’s expansion accused of violating Xi’s policies
The Chinese media website Phoenix.com, known as the CCP’s external propaganda, published an article on September 21, 2021, analyzing in detail the trillion-dollar debt road of Evergrande Group. The article said that Evergrande’s debt expansion began in 2016, because Evergrande ran counter to the “housing, not speculating” policy of the Xi Jinping authorities.
In 2016, the CCP’s regulatory policy began to adjust to deleveraging. In May of the same year, the People’s Daily, the mouthpiece of the CCP, said in an article titled “Ask the Trend in the First Quarter – Authorities Talk About the Current Chinese Economy” that high leverage will inevitably bring high risks, and poor control will lead to systemic financial problems. Crisis; houses are for people to live in. This positioning cannot be deviated from. It is necessary to “de-stock” through the urbanization of people, rather than “de-stock” through leveraging.
The Phoenix.com article said: “Unfortunately, Xu Jiayin, who once hired economist Ren Zeping with an annual salary of 15 million (about 2.31 million US dollars) as a think tank, obviously did not read this article by authoritative people.” “Not only did he not listen to it, Instead, he chose to do the opposite.”
Phoenix.com said that in just over five years since 2016, Evergrande’s debt has more than tripled to 1.36 trillion (about 210 billion US dollars), “and all this process of increasing leverage is faced with the Oversee the policy process of continuous deleveraging”.
The article also said that Evergrande’s debt expansion road “is a wild road that runs counter to regulatory policies.” The article also took Finland, New Zealand, Morocco and other countries as examples, saying that Evergrande’s current debt is “comparable to a country’s GDP”.
Even though Evergrande is in crisis, Xu Jiayin has cashed out 50 billion yuan (about 7.7 billion U.S. dollars) in the ten years since 2009. ◇
Responsible editor: Lian Shuhua#