Xu Jiayin was caught, and the domino effect appeared | Read Enterprise
Source | Uncrowned Finance
Responsible Editor | Han Weiye
Commentary//
As the richest man in a generation and the core figure of China Evergrande, Xu Jiayin's situation has attracted widespread attention from the outside world. As soon as the news of Xu Jiayin's arrest came out, the future of China Evergrande became uncertain.
On the eve of the Mid-Autumn Festival, China's Evergrande announced that Xu Jiayin was "suspected of breaking the law and committing crimes and was subject to compulsory measures in accordance with the law."
This result is not surprising.
In two years, Evergrande fell from a height, and Xu Jiayin, the richest real estate man with strong financial resources, became a rat crossing the street that everyone shouted for a while. Some "creditors" even went to Xu Jiayin's hometown in Henan to try to destroy Xu Jiayin's merit monument and ancestral tomb.
A chicken feather.
Before being controlled, Xu Jiayin was trying to isolate his property, and some clues were discovered by the outside world.
To this day, Xu Jiayin has been arrested, and his relatives are painful, and his enemies are fast.
And then what? How to sweep chicken feathers?
Xu Jiayin was caught, and dominoes fell
In September this year, listed companies under Evergrande resumed trading one after another, and for a while, good news about Evergrande's refinancing appeared, and I thought that Evergrande was going to get on the right track.
Another dark line is that Evergrande's internal executives have been investigated one after another, including Xia Haijun, the former "second-in-command" of Evergrande, Du Liang of Evergrande Wealth, and Zhu Jialin, the former chairman of Evergrande Life.
List of Evergrande under investigation, picture from the Internet
At that time, according to Tencent's "Prism" report, Xu Jiayin's dynamics were abnormal and there were no outsiders. Later, some media broke the news that Xu Jiayin was placed under residential surveillance.
Until Xu Jiayin was caught, the domino effect appeared.
Shortly after the news was announced, private equity tycoon Guan Shanxiang died suddenly at the age of 38. Known as "China's Buffett," Kwan once claimed to be a "loyal adherent" of Xu Jiayin, and his investment products were mainly real estate.
Hu Xijin mentioned on Sina Weibo that "the news of the suicide of a real estate value investor" is suspected to point to Guan Shanxiang.
However, according to Guan Shanxiang, a friend of the Southern Metropolis Report, he did not commit suicide, but had an accident during the trip, and the accident occurred in mid-September.
Kwan's fund fell by 60%.
It is undeniable that Shanxiangyou is under great pressure, according to "Shanxiang Fund", the company's daily operation encountered force majeure factors, and the company's fund products entered the liquidation process.
In any case, Guan Shanxiang's incident touched the sensitive nerves of Evergrande's investors, and the accumulated pressure was expressed through this matter.
On the other hand, the Middle Eastern gold lords found by Evergrande seem to be picking picks.
On October 8, Evergrande Auto said in an announcement that the shareholding of Newton Group announced on August 14 "may not be carried out." Evergrande Auto has sent a letter to Newton Group indicating its willingness to renegotiate with Newton Group on the adjustments required for the proposed transaction. Evergrande Auto reminds investors to "exercise caution when buying and selling shares".
In August this year, Evergrande Auto and Newton Group announced that they had entered into a share subscription agreement with Newton Group, and Newton Group intends to subscribe for 6.177 billion shares of the company for a total price of HK$3.89 billion (equivalent to US$500 million).
Simply put, Newton Group's original strategic investment of $500 million needs to be renegotiated, and the proposed stake has changed. This deal, temporarily cool.
The closing conditions for the completion of this transaction are the completion of the debt restructuring of Evergrande Group and a series of other conditions. But Evergrande's debt restructuring process has not been smooth.
On the evening of September 22, China Evergrande released updated information on overseas debt restructuring. The announcement shows that since March 22 this year, the sales of Evergrande Group have not been as good as the company expected. Based on the Company's current circumstances and consultations with its advisers and creditors, the Company believes that it is necessary to revisit the terms of the proposed restructuring to match its objective circumstances and creditors' demands, and the debt restructuring meeting will not be held.
On the evening of September 24, China Evergrande announced that in view of the fact that its subsidiary Evergrande Real Estate Group is under investigation, the group's current situation cannot meet the qualifications for the issuance of new notes.
Problems make the debt restructuring process more uncertain.
Where did the Xu family property go?
Xu Jiayin was arrested, and another focus of attention from the outside world was the whereabouts of the Xu family's property.
According to public information, the members of the Xu family include Xu Jiayin and Ding Yumei, as well as the eldest son Xu Zhijian, the second son Xu Teng (Teng) He (Peter Xu), and the daughter Xu Xiyun.
Various indications are that Ding Yumei has left the country and holds a Canadian passport. She is suspected of divorcing Xu Jiayin. In the 2023 interim report, there is no "Mrs. Xu", but it is referred to as a third party independent of the Company and its affiliates, which is considered to be a "technical divorce".
According to Tencent News "Periscope", Ding Yumei immediately bought a ticket to leave Hong Kong after learning that Xu Jiayin was being charged by the border. Prior to that, she had been assisting relevant institutions in the debt restructuring of Evergrande Group in Hong Kong.
Some analysts pointed out that since Evergrande was listed in 2009, the cumulative dividend has reached 73.386 billion yuan, and Xu Jiayin and his wife have controlled about 70% of Evergrande's equity for many years, and may take away more than 50 billion yuan in total.
Divorce cannot avoid debt, but foreigner Ding Yumei can also obtain assets through "technical divorce" and leave the country.
Although Ding Yumei left the country first, his second son Xu Tenghe could not escape.
According to public information, Xu Tenghe, also known as Peter Xu, is a Harvard "returnee" who served as the vice president of Evergrande Real Estate Group and once led Evergrande Wealth.
In September, Xu Tenghe was taken away for investigation. Du Liang, who had previously reported that criminal compulsory measures had been taken against the Shenzhen public security, was his subordinate.
There is news that the second son of the Xu family is "difficult to serve", and the news is that Xu Tenghe held a meeting in Evergrande, because the staff at the venue did not provide a paper PPT, Xu Gongzi flicked his sleeves and left, leaving a group of executives looking at each other.
In contrast, the eldest son Xu Zhijian is mainly responsible for gardening, property and other businesses, which is less risky. Xu Zhijian, who graduated from Tsinghua University, was commented on by the outside world as his brother's "low-key" manner, and often ate with employees in the canteen during his time at Evergrande.
There is also anecdotal news that the Xu family also has a daughter, Xu Xiyun. In an Internet celebrity video, there was a woman who claimed to be Xu Jiayin's daughter, and the woman drove a global limited edition Hikaroka Big Snake sports car and lived in Tomson Yipin.
In the video circulating on the Internet, the woman claimed to be Xu Jiayin's daughter
In order to preserve the family's wealth, it is reported that Xu Jiayin also set up a trust fund of 2.3 billion yuan for the family.
Lawyer Zhao Xiaolu of Beijing Zhao Xiaolu Law Firm pointed out that the essence of a trust company is to isolate the assets of the investor, that is, the client, and the various legal disputes that may occur with the client, debt recovery, bankruptcy liquidation, and ensure that the trust assets are not damaged. The trust trustee legally carries out various business activities in the name of the owner of the trust property, and the proceeds are enjoyed by the beneficiaries named in the trust contract, without being subject to any third party's recovery of the trust assets.
This means that the trust will become a property "talisman" for the Xu family.
According to media reports, Xu Jiayin is investigating whether he transferred assets overseas when Evergrande was in financial trouble.
What about the "victims"?
Legal sources pointed out that judging from the current public information, the issues involved in Xu Jiayin are likely to be related to multiple crimes, which are very complex and may take a considerable period of time to clarify.
Song Xianghong's legal team believes that the criminal law crimes that Xu Jiayin may be suspected of include money laundering, loan fraud, fundraising fraud, contract fraud, and bribery.
Some members of the legal profession believe that Xu Jiayin may be punished for several crimes and sentenced to life imprisonment and confiscation of all personal property.
Even so, the series of effects triggered by Evergrande have spread, what should be done next?
According to the ranking of Evergrande's supplier creditors circulating on the Internet, the first place in Evergrande's arrears to suppliers was Nantong Sanjian, involving 36 billion yuan, and was finally accepted by the Rugao Municipal People's Court on January 12, 2022, and officially entered bankruptcy procedures.
In addition, it also owes tens of billions of yuan to Shengjing Bank, Guangtian Shares, Gold Mantis and other enterprises.
Online rumors of Evergrande supplier creditor ranking
On October 2, Skyworth Group founder Huang Hongsheng posted a video saying that Xu Jiayin had used the gimmick of Evergrande's "real estate king" to propose that they deposit money in Evergrande, promising an annual return rate of up to 15%.
Huang Hongsheng said that a good friend was deceived by 4 billion, not only the interest was gone, but the principal was gone, and a person who did not eat or sleep in the office for ten days almost jumped off the building.
It is reported that Evergrande's litigation cases are no longer all under the centralized jurisdiction of Guangzhou. Wumian Financial Inquiry learned that the news circulated in April 2022 and is not the latest news, and the authenticity of the news is doubtful.
However, some members of the legal profession have called for Evergrande's litigation cases to return to normal litigation channels, and that courts in different places directly accept Evergrande's cases, and the litigation efficiency will be greatly improved, and creditors can take this opportunity to file lawsuits to lock Evergrande's assets in different places and recover losses.
However, in the Evergrande case, the largest "victim" group is still the owners of unfinished buildings.
A Guangxi owner who once suffered the suspension of the Hengxi building told Wumian Finance, "After the project resumed work, the final fine decoration was not completed, but it was simply scribbled to a rough raw state." The owner said that the project allows the owner to choose to collect the house independently, not compulsory, but the owner basically went to collect it, and there was no way to wait.
Another owner of a third-tier city said, "Evergrande is about to hand over the house, the hardcover becomes blank, and the decoration can deduct a parking space." ”
Evergrande delivery room changed from hardcover to blank
In September last year, Xu Jiayin reported on Evergrande's resumption of work and production, saying that there were 706 projects nationwide, 668 projects that had resumed work, and 38 projects that had not resumed work. In June this year, Evergrande disclosed a data showing that 677 sold and undelivered projects had effectively resumed work.
At the same time, Evergrande began to resell projects, and as of the end of August this year, Evergrande Real Estate had completed the transfer of a total of 73 real estate projects through equity transfer, land and construction project transfer, trust, nominee holding, etc.
But Evergrande's funding gap remains huge. According to an announcement by China Evergrande, as of June 30, 2023, the group's total liabilities were 2.39 trillion yuan, and 1.78 trillion yuan after excluding contract liabilities of 603.98 billion yuan.
Now, Xu Jiayin and others may be coming to an end, but it is not yet the end of the expectations of Evergrande and its creditors.