Xu Jiayin's "Mid-Autumn Festival Tribulation", his son was also taken away

Source | Deep Blue Finance

Written by | Wu Ruixin

This should be the worst Mid-Autumn Festival that Boss Xu has ever had.

On the evening of September 28, China Evergrande announced that it had received notice from relevant departments that Mr. Xu Jiayin, executive director and chairman of the board of directors of the Company, had been taken compulsory measures in accordance with the law due to suspected violations and crimes.

Some criminal law experts told the 21st Century Business Herald that judging from the current public information, the problems involved in Xu Jiayin are likely to be related to multiple crimes. In the case of notification by the relevant authorities, the compulsory measures taken are likely to be different from the "residential surveillance" misreported by foreign media before.

In addition, First Finance quoted people familiar with the matter that Xu Jiayin's second son Xu Tenghe (Peter Xu) was also taken away at a similar time.

Both father and son were taken away. Presumably, no matter how sweet the mooncake is, it can't suppress the bitterness in the hearts of Xu's father and son.

1

Seven generals have been taken away, including Xu Jiayin's second son

Before Xu Jiayin was taken away, in the past half month, a number of core personnel of the Evergrande Department had "accidents" in turn. Among them are Xia Haijun, former president of Evergrande Group, and Pan Darong, former chief financial officer.

After the news that Xu Jiayin was taken away was confirmed, the news that more executives were taken away was also exposed by the media.

According to sources familiar with the matter, Xu Jiayin's second son, Xu Tenghe, was also taken away together. He has led the work of Evergrande Wealth, and Du Liang, the general manager of Evergrande Wealth, who was criminally taken by the Shenzhen police on September 16, is his subordinate.

Xu Tenghe's information has rarely appeared in public information, most recently in December 2021. At that time, foreign media revealed that it sold a mansion on Sunset Boulevard in Los Angeles at a discount of $12.5 million.

According to Next Estate, Xu Tenghe was hastily married last year, and the bride is an internet celebrity born in 1999. It is said that the whole wedding still cost millions.

In addition, the executives of the Evergrande department who were taken away for investigation at a similar time also included Yong Litao, former chairman of Evergrande Real Estate Group and Evergrande Property Group.

Pan Darong, who was taken away for investigation by Caixin earlier, was actually taken away at a similar time.

If you count Ke Peng, who was taken away for investigation at the beginning of this year, seven executives linked to Evergrande have been investigated.

In general, the executives who were taken away for investigation mainly involved three businesses:

1. Financing, such as Pan Darong;

2. Evergrande wealth, such as Du Liang;

The third is to involve Shenzhen's old reforms, such as Ke Peng, who was taken away first.

After Xu Jiayin and other executives were investigated, the burden of Evergrande fell on the head of executive director Sean. Previously, when Xu Jiayin spread the rumor of being taken away, there was news that Evergrande's weekly meeting was presided over by Sean.

It is reported that Sean is an old friend of Xu Jiayin for many years and officially joined Evergrande in 2013, but before the thunderstorm, he did not stand in the foreground, nor did he directly intervene in several sensitive businesses.

2

Evergrande is once again facing a liquidation crisis

Xu Jiayin, 65, may have nothing

As the founder and absolute controller of the Evergrande Empire, Xu Jiayin was controlled at this time, and the most direct impact was the debt restructuring process he actively promoted.

Previously, Evergrande's overseas debt restructuring also changed suddenly.

On September 22, China Evergrande suddenly issued an announcement that it would cancel the creditors' meeting. Subsequently, on the evening of the 24th, China Evergrande issued another announcement that because Evergrande Real Estate Group was being placed on file for investigation, the company could not meet the qualifications for new note issuance. This means that Evergrande's foreign debt restructuring is in vain.

It is understood that Evergrande's overseas debt restructuring plan, which has a scale of more than 19 billion US dollars, was officially announced at the end of March this year, and there are three specific plans:

First, Evergrande reissues new notes with a maturity of 10-12 years, replacing old bonds with new notes 1:1;

The second is to issue new notes with a maturity of 5-9 years, and are linked to the equity of Evergrande Property and Evergrande Automobile, and the debt-to-equity swap;

The third is the combination of one and two.

It is reported that Evergrande's offshore debt involves a total of more than 30 billion US dollars, which is one of the largest debt restructuring operations in the world.

But now that the restructuring meeting has been cancelled and the new notes originally scheduled to be issued have been stranded, Xu Jiayin, the actual controller of Evergrande, has also been taken compulsory measures. At this time, overseas creditors also panicked.

According to foreign media reports, some overseas creditors revealed that if Evergrande cannot submit a new debt restructuring plan by October 30, then these creditors will support the court winding-up petition against Evergrande.

△ Evergrande is the English name of Evergrande

According to Evergrande's financial report, as of June 2023, China Evergrande's total liabilities were 2.39 trillion yuan, and after excluding contract liabilities of 603.98 billion yuan, it was 1.78 trillion yuan.

As of June 2023, China Evergrande's revenue was 128.18 billion yuan, and the total net loss was 39.25 billion yuan.

Industry insiders have also become pessimistic about Evergrande's debt restructuring again.

Bai Wenxi, chief economist of IPG China, told First Finance and Economics that it is still uncertain whether Evergrande will eventually go bankruptcy, and whether it will enter bankruptcy liquidation is not only a matter of business operation and legal issues, but also needs to consider social issues such as "guaranteeing the handover of buildings". It is unrealistic for Evergrande to formally announce its bankruptcy proceedings before there is a practical solution to the problem of "guaranteed handover of buildings", but its prospects are indeed not optimistic.

"At present, parties may need more time and effort to find a solution, including renegotiating the terms of debt restructuring, seeking new investors, selling assets, etc. If the current predicament cannot be effectively resolved, the likelihood of bankruptcy will increase. Bai Wenxi said.

But if Evergrande finally comes to the step of bankruptcy and liquidation, Xu Jiayin, who is now almost 65 years old, may have "nothing".