Hui Ka Yan: the real king of debt

Hui Ka Yan © Getty Images
Hui Ka Yan: perennial youth, but his wealth may be fleeting

Hui Ka Yan, China’s richest property mogul, rode to success on the back of a boom. Now there are fears that it could all come to a messy end. Jane Lewis reports.

Donald Trump once called himself “the king of debt”, but China’s richest property mogul, Hui Ka Yan, has a much stronger claim to the throne, says Bloomberg. No one has become wealthier “on the back of a corporate borrowing binge than Hui”, who is reckoned to be personally worth $35bn. Yet having ridden China’s property tiger upwards, there are now fears that his junk-rated company, China Evergrande Group – “the nation’s most indebted developer” – is dangerously leveraged. Its collapse would be messy, to say the least.

Burning through cash

In many ways, Hui (also known as Xu Jiayin) is “emblematic of recent trends in global business”. Worldwide corporate debt has swelled by 26% over the past decade to $132trn as companies have taken advantage of historically low interest rates to fund growth. And Evergrande has become “an extreme example of the tug-of-war between bulls and bears” over how long the good times will last. The company’s stock, the main source of Hui’s wealth, has “trounced the market in recent years” – yet has also been “a favourite target of short-sellers”.

The perennially youthful-looking Hui, 60, grew up poor, the son of a widowed warehouseman, in China’s central Henan province. After graduating from Wuhan University with a degree in metallurgy, he seemed destined for a lifetime career at a state-owned steel company, says Forbes. But in 1992 he quit his job to try his luck in the bright lights – heading for the new “special economic zone” of Shenzhen in China’s Guangdong province and joining a property trading company. Four years later, Hui struck out on his own with Evergrande, swiftly tapping into China’s insatiable demand for new houses.

Political connections probably helped. According to the Asian property news site Mingtiandi, Evergrande’s early backers included the younger brother of former Chinese premier Wen Jiabao, who allegedly took a 16% holding in 2001. Certainly, Hui seems to have made a point of toeing the party line. By 2017, as China Watch notes, he had become “a member of the country’s top political advisory body”. That year, Evergrande had “nearly 600 projects across more than 200 cities” in China, notes Forbes. With profits apparently rocketing, shares in the Hong Kong-listed company (which is still three-quarters-owned by Hui and his wife) enjoyed an “astronomical surge” of 469% – adding “more than $32bn” to the maestro’s net worth and, briefly, securing his ascent to the much-sought-after position of China’s richest man.

A love of football

Despite his huge imprint on the property market, Hui is most famous in China for his football “grandstanding”, says Randolph Marsh on wildeastfootball.net. Having bought the local club, renamed Guangzhou Evergrande, he has ploughed millions into “the largest football school in the world” in hopes of fuelling a home-grown Chinese super league – so far without much success. Despite input from an army of Real Madrid coaches, “we have seen no Messis”, Hui recently lamented. “As for Cristiano Ronaldos, we haven’t seen any either.”

For now, Hui has bigger concerns on his plate, says the Financial Times. As China’s property market cools, there’s “a growing risk” that both Evergrande, and its irrepressible founder, may be crushed by “unmanageable debt”. The company currently owes more than $100bn, and efforts “to scale back its towering debt pile” seem to have stalled. “If Asia’s largest economy sputters or credit markets tighten,” concludes Bloomberg, “Hui’s debt-fuelled expansion could come back to bite him.”