On September 2nd, the High Court of Hong Kong rejected two applications filed by the representative lawyers of Xu Jiayin, the founder of China Evergrande Group. The court denied the request to extract approximately 1.2 million Hong Kong dollars from assets held in trust by Xu Jiayin to pay legal fees and waived the related prohibition against defense order.
The law firm representing Xu Jiayin, Zhou Di Law Firm, had earlier applied to modify the asset freezing order. They intended to withdraw some funds from the approximately 20 million Hong Kong dollars held in trust under Xu Jiayin’s name to cover legal fees and sought exemption from the order prohibiting defense.
The law firm argued that the around 20 million Hong Kong dollars in funds currently held in trust by Xu Jiayin’s former representative law firm, Baker McKenzie Solicitors, could not be easily accessed due to restrictions imposed on Xu Jiayin. As a result, they were unable to pay approximately 1.2 million Hong Kong dollars in litigation fees.
On September 2nd, Xu Jiayin’s lawyer stated in court that since the end of 2024 or the beginning of 2025, they had been unable to directly receive instructions from Xu Jiayin. Instead, they had only received vague instructions from Xu Jiayin’s lawyers in mainland China to continue handling related lawsuits in Hong Kong on his behalf.
The lawyer further explained that Xu Jiayin was currently restricted from handling or discussing his assets with others, making it impossible for the legal team to directly obtain his authorization to arrange for payment of litigation fees.
The liquidator of Evergrande argued that since the lawyers could not communicate directly with Xu Jiayin, they could not represent him in applying to utilize the related assets.
Judge Ouyang Haorong ruled that the law firm representing Xu Jiayin failed to prove they had obtained the necessary authorization to handle the related assets on behalf of Xu Jiayin. They also could not prove that the assets currently under control were the only means to pay the litigation fees, leading to the rejection of the two applications.
The court also inquired whether Xu Jiayin’s family could bear the related costs, but the lawyers stated that there was no evidence to show that his family was willing to pay.
This is not the first time Xu Jiayin has faced restrictions from the Hong Kong court for failing to pay the aforementioned litigation fees.
In February of this year, the High Court of Hong Kong had ordered Xu Jiayin to pay approximately 1.2 million Hong Kong dollars in litigation fees by February 20th, failing which he would be prohibited from further defending himself in related cases.
Xu Jiayin’s legal representative firm, Zhou Di Law Firm, mentioned that around 20 million Hong Kong dollars under Xu Jiayin’s name were entrusted to the former representative law firm, Baker McKenzie Solicitors, and couldn’t be accessed easily. The law firm had applied earlier this year to modify the asset freezing order to withdraw funds from this trust account to pay the litigation fees and sought exemption from the order prohibiting defense.
During the previous court proceedings, it was highlighted that Xu Jiayin had not complied with the payment order while continuing to engage Hong Kong lawyers and a senior barrister team, casting doubt on the explanation for why he couldn’t pay the court-ordered fees due to financial constraints.
In the background, following the liquidation order handed down by the Hong Kong court early in 2024, the liquidators initiated legal action to recover approximately 46.8 billion Hong Kong dollars in dividends and remuneration from Xu Jiayin, his former wife Ding Yumei, former CEO Xia Haijun, former CFO Pan Darong, and froze around 60 billion Hong Kong dollars worth of global assets under their names. Subsequently, due to incomplete disclosure of assets by Xu Jiayin, the court appointed Evergrande’s liquidators as the managers of his assets.