25 years ago, the property purchased by Xu Jiayin, the founder of China’s Evergrande Group, in Hong Kong is set to be auctioned off to repay debts. Xu bought the property in Hong Kong for 1.75 million Hong Kong dollars after his early success.
The Hong Kong High Court ruled that Xu Jiayin must repay over 5.3 billion Chinese yuan in debts to HengXin Conglomerate, a subsidiary of China Citic Group, or else his properties under his name will be sold to settle the debts, according to an absolute charging order.
HengXin Conglomerate later filed an appeal, demanding that Xu Jiayin hand over his vacant property in Tsim Sha Tsui and instructed for it to be sold under court order. The case was heard in the Hong Kong High Court on September 16.
In Xu Jiayin’s absence during the hearing, the court approved the execution of the charging order. The property will be auctioned off to partially repay the outstanding debts.
According to Hong Kong media reports from Sing Tao Daily, the property in question is located at Unit A, 6th Floor, Heung King House, 144 Austin Road, Kowloon.
The unit reportedly consists of two bedrooms and one living room with an area of approximately 375 square feet. Xu Jiayin is said to have purchased it in 1999 for 1.75 million Hong Kong dollars after making his first bucket of gold in the real estate business. This property is therefore known as Xu Jiayin’s starting house.
As per Evergrande Property’s semi-annual report, in the first half of this year, the company’s operating income was around 6.22 billion Chinese yuan, an increase of 1.2% compared to the previous year. The gross profit margin was about 20.2%, with a net profit of approximately 499.8 million Chinese yuan and a net profit margin of about 8.0%, a 4.9 percentage point decrease year-on-year.
Xu Jiayin has been in custody for over half a year. Previously, his luxury properties in Hong Kong were taken over by creditors and sold at half their estimated value.
In May this year, Hong Kong media reported that Xu Jiayin’s luxury villa in The Peak, owned by him or his related parties, was publicly on sale for over a year until May this year, when it was finally sold. The selling price was 470 million Hong Kong dollars, about half of the previous year’s estimated value of 880 million Hong Kong dollars, equivalent to a 53% discount.
The villa was taken over by the Bank of China in 2022 and put up for sale about a year ago. Although it was reported that several dozen potential buyers inquired about it, no deal was closed, and the identity of the current buyer remains unknown.
Public information indicates that Xu Jiayin purchased several villas in Block B, C, and E on Braga Circuit in The Peak in 2010, with a total market value of around 2.5 billion Hong Kong dollars. After Evergrande encountered a crisis, Xu Jiayin mortgaged these luxury properties.
In August last year, Evergrande filed for bankruptcy protection in the United States. Xu Jiayin was reported to have been arrested in the same year in September. In March this year, Xu Jiayin and Evergrande were subject to a new consumption restriction order. On that day, Evergrande Real Estate was fined 4.175 billion Chinese yuan, and Xu Jiayin was fined 47 million Chinese yuan. Both Xu Jiayin and the then Vice Chairman and CEO of Evergrande, Xia Haijun, were banned for life from entering the securities market.