The news from the financial world on September 28 that "Evergrande Department" and Xu Jiayin have finally settled!
On the evening of the 28th, China Evergrande announced on the Hong Kong Stock Exchange that the company has been notified by relevant departments that Xu Jiayin, the executive director and chairperson of the board of directors of the company, has been taken compulsory measures according to law for suspected illegal crimes. China Evergrande said that the shares will continue to suspend trading until further notice.
It is worth noting that on the morning of the 28th, half an hour before the opening of the market, the "Hengda" troika China Hengda, Hengda Automobile, and Hengda Property urgently issued an announcement saying that they temporarily suspended trading on the Hong Kong Stock Exchange.
One detail worth noting was that Evergrande had always liked to release "heavy hitters" late at night, but this time it was unusual. The news of the suspension of trading was not announced until 30 minutes before the opening. This morning, various speculations and rumors about Xu Jiayin and Evergrande surged from the outside world.
Xu Jiayin has not been seen in public for many days
According to public reports, on July 24 this year, Xu Jiayin organized a meeting of Hengda Baojiao Building, which lasted for more than half an hour. At the meeting, Xu Jiayin asked several regional companies about the Baojiao Building. Since then, Xu Jiayin has not been seen publicly attending the event.
In early August, some executives of Evergrande were detained.
On August 30, Xu Jiayin was exposed as saying that "outsiders are not allowed to follow their opinions at the Guangzhou headquarters. External companies need Xu Jiayin to sign, and they also need to be handed over by their staff after reporting."
On the evening of September 16, the Shenzhen police notified Hengda Wealth Du and other suspected criminals to take criminal coercive measures. The "Du" in the notice is Du Liang, the legal representative, executive director and general manager of Hengda Wealth.
After that, Zhu Jialin, the former chairperson of Evergrande Life Insurance, was also taken away for investigation.
On September 26, Caixin reported that former Evergrande CEO Xia Haijun and Chief Financial Officer Pan Darong had both been detained or taken away.
Xu Jiayin seems to be "prepared for a rainy day"
According to the "2023 Hurun Global Rich List", Xu Jiayin’s net worth on the list is 20 billion yuan, ranking 1,100th in the world, down 712 places from last year and more than 90% from two years ago. At the time of the "Evergrande" stock price slump, Xu Jiayin’s personal worth has also further shrunk.
Although his personal wealth has shrunk sharply, Xu Jiayin appears to be "prepared for a rainy day."
Earlier, it was revealed that Xu Jiayin had divorced his wife Ding Yumei in 2022, which was interpreted by the outside world as a division of property.
According to ifeng.com, Xu Jiayin’s son was also exposed to a single family trust fund of up to 2.30 billion before Xu Jiayin declared Evergrande’s bankruptcy, which is also known as Xu Jiayin’s "Rich Second Generation Protection Plan" for his son.
Evergrande workout process suffered a setback
Just a few days ago, Hengda overseas workout process suffered a severe setback.
On the evening of the 22nd, China Evergrande Group released an update on overseas workout information. The announcement shows that since March 22 this year, Evergrande Group’s sales have not been as good as the company expected. Based on the company’s current situation and consultations with its advisors and creditors, the company believes it is necessary to re-examine the terms of the proposed restructuring to match its objective situation and creditors’ demands, and the workout meeting will not be held.
After the workout meeting was postponed indefinitely, China Evergrande announced on the evening of the 24th that in view of the fact that the subsidiary Hengda Real Estate Group is being investigated, the group’s current situation cannot meet the eligibility for the issuance of new notes.
This will have a direct impact on Hengda’s workout, and the new notes are the top priority in Hengda’s restructuring plan.
In March this year, Evergrande announced a $19.149 billion overseas workout plan and offered creditors three options, all of which need to issue new notes. First, replace the old debt with the new note at a 1:1 basis, and the new note has a maturity of 10-12 years. Second, convert it to a new note with a maturity of 5-9 years, and convert it to a combination of Evergrande Property, Evergrande New Energy Vehicles or Equity-Linked Notes linked to Evergrande’s listed stocks. Third, a combination of the above two.
China has long been insolvent.
As of the end of June, China Evergrande’s revenue in the first half of this year was 128.18 billion yuan, and its gross profit was 9.80 billion yuan. During the period, the operating loss was 17.38 billion yuan, the non-operating loss was 15.03 billion yuan, and the income tax expenditure was 6.84 billion yuan, and the total net loss was 39.25 billion yuan. As of June 30, 2023, China Evergrande’s total debt was 2.3882 trillion yuan. After excluding the contract debt of 603.98 billion yuan, it was 1.78 trillion yuan.
Under the interweaving of various news, Evergrande ushered in the finale.