Source: Broker China Author: Yang Shan
News of the sale of Xu Jiayin's luxury home came out.
Recently, according to Hong Kong media reports, house B of the three bungalows at No. 10 Hilltop Buli Path, once owned by Evergrande founder Xu Jiayin and related parties, was recently taken over by a buyer for about HK$470 million after being sold. This price is almost “short” of the one-year valuation of HK$880 million.
According to reports, the property related to Xu Jiayin mentioned above is House B, No. 10 Buli Path. It has been taken over by CCB Asia for a long time and sold a year ago.
In response, brokerage China's reporter sought evidence from Evergrande. As of brokerage China's press release, no official response has been received.
Xu Jiayin's Hong Kong mansion “cut short” for sale
Recently, according to Hong Kong's “Ming Pao” report, house B of the three bungalows at No. 10 Hilltop Buli Path, once owned by Evergrande founder Xu Jiayin or related persons, was recently accepted by a buyer for about HK$470 million after being sold for more than a year.
According to information, the above bungalow has a useful area of about 5,171 square feet. The property was taken over by China Construction Bank (Asia) in November 2022 and officially put on the market for sale in early March 2023. At the time, the market valuation was HK$880 million, and the unit price was about HK$172,000 per square meter. It attracted dozens of groups of buyers to inquire, but ultimately failed to be completed because the bids received did not meet the requirements of creditor banks.
After more than a year of being put up for sale, the property finally attracted buyers who actively negotiated. Market sources revealed that the creditor bank sold the property at a price of about 470 million yuan, with a unit price of about 90,900 yuan/square meter. If the deal is true, the transaction price is 46.6% lower than the market valuation of 880 million yuan more than a year ago.
According to public information, Xu Jiayin purchased three bungalows at No. 10 Buli Path in the Peak in 2010, namely House B, House C, and House E, with a total market value of about HK$2.5 billion.
In 2021, after Evergrande experienced a liquidity crisis, Xu Jiayin mortgaged these three luxury homes one after another in order to ease financial difficulties. In October 2022, Xu Jiayin mortgaged a luxury home purchased here to China Construction Bank (Asia) as a grace for overdue unpaid bonds, and was officially taken over by China Construction Bank (Asia) in March 2023; House C and House E were also mortgaged.
In the end, all three luxury homes became “bank owners”, that is, when the owner of the property is unable to repay the mortgage loan for any reason, the creditor (bank owner) will apply to the court to take back the property, and then entrust an agent or auction house to sell or auction it to the public to find new contributors and pay off debts. This type of property is known as a “silver master” in Hong Kong.
Earlier, in November 2021, after Evergrande exploded, people familiar with the matter also revealed to the brokerage firm's Chinese reporter that from July to November 2021, Xu Jiayin raised funds by selling personal assets or pledging shares, injecting a total of 7 billion yuan in cash into the group.
In addition to the mansion, in June of last year, Evergrande's office building “China Evergrande Center” in Hong Kong was also delisted and renamed “Yantong Insurance Center”. The building was originally the “American Wantong Tower”. It was once the headquarters of Chinese real estate and is a Grade A office building. In 2015, Evergrande bought the building from Chinese Real Estate for HK$12.5 billion and changed its name to China Evergrande Center.
This also means that the large number of office and residential assets purchased by Evergrande and Xu Jiayin in Hong Kong during the period of rapid progress has gradually erased the “Evergrande” mark.
Xu Jiayin has long been arrested and punished
The news of the sale of luxury properties in Hong Kong once again reminded the outside world of Xu Jiayin.
As early as September of last year, China Evergrande issued an insider announcement on the Hong Kong Stock Exchange stating, “The Company has received notice from relevant departments that Xu Jiayin, the Company's executive director and chairman of the board of directors, has taken coercive measures in accordance with the law on suspicion of breaking the law and committing a crime.”
On March 18 of this year, 172 days after Xu Jiayin was suspected of breaking the law and committing a crime, Evergrande Real Estate issued an announcement stating that its company had received administrative penalties from the Securities Regulatory Commission and an advance notice prohibiting entry into the market.
The Securities Regulatory Commission reported that the 2019 and 2020 annual reports disclosed by Evergrande Real Estate contained false records, that its public issuance of corporate bonds was suspected of being fraudulently issued, and that relevant information was not promptly disclosed in accordance with regulations.
The Securities Regulatory Commission pointed out that Xu Jiayin, then chairman of Evergrande Real Estate, comprehensively managed all businesses of Evergrande Real Estate and instructed other personnel to inflate Evergrande Real Estate's annual report performance. The methods were particularly bad, and the circumstances were particularly serious. He was the directly responsible supervisor, and at the same time organized and directed the execution of the above illegal acts as the actual controller.
The Securities Regulatory Commission decided to order Evergrande Real Estate to make corrections, give a warning, and impose a fine of 4.175 billion yuan; Xu Jiayin was warned and fined 47 million yuan. At the same time, Xu Jiayin was also banned from entering the securities market for life.
There is also no room for optimism about the situation of the listed company China Evergrande. On January 29 this year, the Hong Kong High Court issued an order to liquidate China Evergrande. Edward Simon Middleton and Wong Wing Sze of Amman Consultants Limited were appointed by the High Court as joint and separate liquidators of China Evergrande on January 29, 2024. Trading of China Evergrande shares will continue to be suspended until further notice.
On April 30 this year, China Evergrande also failed to release its 2023 report as scheduled, and the company continued to suspend trading.
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