After being seized by creditors for 11 months, two Hong Kong luxury homes originally owned by Hui Ka Yan, the founder of Evergrande, have remained unsold despite a significant price cut. The reason for the stagnation of Hui Ka Yan’s luxury homes is due to the recent slowdown in the luxury property market in Hong Kong.
According to a report by China Fund News on October 23, sources revealed that the combined selling price of the C Block and E Block located at 10 Broadwood Road is HK$900 million (approximately US$116 million), whereas at the end of last year, the estimated value of these properties was over HK$1.5 billion, equivalent to a 40% discount.
According to sales brochures from real estate agencies, the luxury residence in the C Block covers an area of 5,433 square feet with a price of HK$470 million; while the E Block luxury residence spans 4,933 square feet with a price of HK$430 million.
These properties are linked to Hui Ka Yan through his associate Tan Haijun, who is listed as the director of the companies owning these properties. Creditors at Oristone Lending Company appointed Cosimo Borrelli and Tang Deyang as receivers for these properties last year. Documents show that Hui Ka Yan mortgaged the properties to Oristone for a loan amount of HK$821 million at the end of 2021.
Earlier this year, the B Block luxury home at Broadwood Road, also under receivership, was sold for slightly more than half of its previous valuation.
In August, liquidators stated that Evergrande was seeking to recover $6 billion in bonuses and salaries from seven defendants, including Hui Ka Yan.
Dating back to 2010, Hui Ka Yan purchased three villas at 10 Broadwood Road, namely the B, C, and E Blocks, with a total market value of around HK$2.5 billion. After Evergrande faced a liquidity crisis, C and E Blocks were mortgaged to Oristone for financing at the end of 2021. In October 2022, Hui Ka Yan mortgaged the B Block villa to China Construction Bank (Asia) as an extension for overdue debts. On May 21 this year, the B Block villa at 10 Broadwood Road was sold for HK$470 million.
On June 25, Hengxin Hengju applied to the High Court of Hong Kong for Hui Ka Yan to surrender the vacant property at Cheung King Mansion in Tsim Sha Tsui based on a charging order. The court will review this application.
On September 17, the above-mentioned case officially went to court, with Hengxin Hengju demanding that Hui Ka Yan surrender his vacant property in Tsim Sha Tsui for sale under court supervision. The court, in a hearing on September 16 at the High Court of Hong Kong where Hui Ka Yan was absent, approved the execution of the charging order. After the property is sold through auction, the proceeds will be used to repay part of the debts.
According to the Hong Kong Economic Times, earlier this year, China Evergrande was ordered to liquidate, and the High Court of Hong Kong ruled that founder Hui Ka Yan must repay HK$5.3 billion in debts to Hengxin Group’s subsidiary, Hengxin Hengju, or sell his properties to offset the debt based on the charging order.
The properties involved are considered by outsiders to be “old and dilapidated” properties for Hui Ka Yan, located at Unit A, 6th Floor, Cheung King Mansion, 144 Austin Road in Kowloon. The property, comprising two bedrooms and a living room, has an area of approximately 375 square feet.
This was the first property Hui Ka Yan purchased in Hong Kong in 1999 after making his initial fortune in the real estate business, costing HK$1.75 million. It is the only property owned by Hui Ka Yan in Hong Kong under his personal name.
Upstream News reported that as liquidators search for Hui Ka Yan’s assets worldwide, properties owned by Hui Ka Yan’s former wife, Ding Yumei, face the risk of being sealed or sold to repay creditors.
Ding Yumei owns multiple properties globally valued at $285 million, with properties in Canada, the UK, and including one of the most expensive luxury residences in London.
In May this year, the Securities and Futures Commission made an administrative penalty decision on Evergrande Real Estate for fraudulent bond issuance and illegal disclosure of information, requiring correction, issuing a warning, and imposing a fine of HK$4.175 billion. Hui Ka Yan, the former chairman and actual controller of Evergrande Real Estate, was fined the maximum amount of HK$47 million and banned from the securities market for life.
The Securities and Futures Commission found that from 2019 to 2020, Evergrande Real Estate artificially inflated income and profits by recognizing revenue prematurely, leading to fraudulent bond issuance in the stock exchange market. The related annual reports disclosed false information. Additionally, Evergrande Real Estate failed to timely disclose regular reports, major litigation and arbitration, and the status of outstanding debt repayment as required by regulations.
The Securities and Futures Commission penalized Evergrande Real Estate for fraudulent bond issuance based on 20% of the funds raised and imposed the maximum penalty for illegal information disclosure.
In August 2023, a notice from the Hong Kong Stock Exchange indicated that Ding Yumei was referred to as an “independent third party unrelated to the Company and its affiliates,” instead of “spouse,” suggesting a divorce after over 30 years of marriage. However, previous reports indicated that before the trouble began, Hui Ka Yan and Ding Yumei had undergone a “technical divorce,” allowing Ding Yumei to financially separate from Hui Ka Yan to avoid debt obligations.
In July this year, courts in Hong Kong and London issued a global asset freeze injunction against Ding Yumei to recover approximately $6 billion in dividends and remuneration from Hui Ka Yan, Ding Yumei, and former senior executives of Evergrande.
In September, Ding Yumei faced a lawsuit where liquidators of Evergrande sought to recover about HK$2.8 billion received in dividends through two wholly-owned companies from 2018 to 2020 in the form of assets freeze. Ding Yumei’s assets were frozen in the lawsuit, and the UK court recently allowed her to spend a maximum of £20,000 (approximately $26,187) per month as living expenses.
According to previous announcements, Chinese Evergrande liquidators applied for several injunctions in the lawsuit, restricting Hui Ka Yan, Ding Yumei, and Xia Haijun from disposing of, selling, or reducing the value of their global assets beyond the specified limits. These injunctions were first issued on June 24 in Hong Kong against Hui Ka Yan and Xia Haijun, gradually expanding to include Ding Yumei.