Xu Jiayin may not be able to afford 47 million

City Boundary

2024-06-01 15:03Posted on the official account of Beijing Municipality

Xu Jiayin was fined 47 million yuan, which caused a thousand waves on the Internet. Does he still have the money to pay the fine? Xu Jiayin has too many debt disputes, even if he has assets in his name, they have been sued by creditors to freeze them, or they have been transferred due to debt disputes.

01, "The circumstances are very serious and the nature is very bad"

Song Xiang from Hubei looked at the two photos taken on his mobile phone when he was looking at a real estate in Evergrande in 2020, and he couldn't help but feel a lot of emotion in his heart. At that time, although the location of Evergrande Real Estate was remote, its popularity was extremely strong, as if it indicated the glory of the future. Then, what Song Xiang didn't expect was that just a year later, in September 2021, Evergrande would be thunderous.

Over the past two years, the news of Evergrande and Xu Jiayin, like the bloody plot in a TV series, has touched everyone's hearts: Xu Jiayin "jumped off the building"? Xu Jiayin was arrested...... This time, it was Xu Jiayin who was punished.

On May 31, the website of the China Securities Regulatory Commission announced that it made an administrative penalty decision on the illegal case of fraudulent issuance and information disclosure of Evergrande real estate bonds in accordance with the law, ordered Evergrande Real Estate to make corrections, gave a warning and fined 4.175 billion yuan, and imposed a maximum fine of 47 million yuan on Xu Jiayin, the then chairman and actual controller of Evergrande Real Estate, and took a lifetime ban on the securities market.

To put it simply, Evergrande Real Estate inflated its revenue and profits by recognizing revenue in advance, resulting in fraudulent practices in the bonds it issued. The amount of money involved in this fraud is huge, such as Evergrande Real Estate's fraudulent issuance of a total of 20.8 billion yuan of bonds between May 2020 and April 2021.

In addition, Evergrande Real Estate has not disclosed the 2021 annual report, 2022 interim report and 2022 annual report in accordance with the regulations, failed to disclose the situation of major litigation and arbitration in accordance with the regulations, and failed to disclose the failure to pay off the debts due as required. In terms of wording, in addition to the use of a maximum fine, the penalty decision used terms such as "the means are particularly heinous and the circumstances are particularly serious" against Xu Jiayin, the chairman of the board of directors at the time.

As soon as the punishment decision came out, the Internet exploded. Some netizens left a message, "This fine is a bit small." "In fact, through layers of equity penetration, it can be seen that behind Evergrande Real Estate is China Evergrande, a Hong Kong-listed company, and behind China Evergrande stands the BVI (British Virgin Islands) company." The CSRC has a standard for every kind of fine, and it is not just a matter of just opening a high price. Some of Evergrande Real Estate's behaviors are not carried out in China, and the CSRC cannot punish them. Huang Lichong, president of Huisheng International Capital, who is familiar with domestic and international laws, told "City Boundary".

This time, the punishment is aimed at the illegal acts of Evergrande Real Estate's domestic bond market, and does not involve the risk matters of other sectors of Evergrande Group. Song Xiang lamented to the "City Boundary" that the securities market is a place of integrity, and Evergrande Real Estate has not only harmed the interests of investors, but also seriously disrupted the market order. "The CSRC's punishment this time is also a warning to other companies."

Along with Evergrande Real Estate and Xu Jiayin, there are also former Evergrande executives, such as Pan Darong, Pan Hanling, Qian Cheng, etc., who have been punished and warned to varying degrees, with fines ranging from 200,000 yuan to 9 million yuan. After reading the full text of the administrative penalty decision, "City Boundary" found that in addition to Evergrande Real Estate and Qian Cheng, Xu Jiayin, Pan Darong and others all put forward statements and defense opinions.

Taking Xu Jiayin as an example, he stated five points in his defense opinions, one of which was that "the relevant illegal acts were specifically organized and carried out by others, and there was insufficient evidence to determine that Xu Jiayin instructed and organized the illegal acts, nor did he instruct others to engage in illegal acts based on his identity as the actual controller." However, the CSRC believes that the evidence on record is sufficient to prove that Xu Jiayin, as the chairman and actual controller of Evergrande Real Estate, arranged and organized financial fraud.

In the end, the CSRC rejected the statements and defenses of Xu Jiayin and others. At this point, the dust has settled on the punishment case. It is worth noting that the CSRC also mentioned in the penalty letter that because Xia Haijun could not be contacted, the announcement service procedure had been initiated, and he would be dealt with separately in accordance with the law.

Xia Haijun is the No. 2 person in Evergrande Group, and he is also recognized as "the most trusted man by Xu Jiayin" within Evergrande. Since Xu Jiayin was controlled, Ke Peng, Du Liang, Pan Darong and other Evergrande executives have been taken away one after another, and Xia Haijun has not been heard from at all. Even in May this year, Xia Haijun was publicly reprimanded by the Shenzhen Stock Exchange, a key figure in Evergrande Group, is still in a state of disconnection.

02, "Xu Jiayin may have no assets under his name"

Regarding the question of "whether Xu Jiayin can afford 47 million yuan", netizens have a lot of discussions. Some people say that 47 million yuan is so much, Boss Xu must not be able to pay it back. Some netizens retorted, "The emaciated camel is bigger than the horse, after all, the net worth is there!" ”

Although Xu Jiayin's net worth has shrunk significantly in the past two years (204 billion yuan at its peak), the "2023 Hurun Global Rich List" released in September 2023 shows that Xu Jiayin's net worth is still 20 billion yuan. So, does this mean that Xu Jiayin can afford to pay back 47 million yuan? "Whether he can afford to pay the $47 million fine depends on the liquidity of his assets and actual control." Bai Wenxi, vice chairman of the China Enterprise Capital Alliance, told "City Boundary".

Xu Jiayin's net worth of 20 billion yuan mainly includes public stocks and company assets. For example, as of the reporting period of December 2022, Xu Jiayin held 59.78% of the shares of China Evergrande, and the reference market value of the shareholding at the end of the period was 11.634 billion yuan.

However, Huang Lichong believes that Xu Jiayin may no longer have assets in his name, and the assets are likely to be in the hands of his ex-wife Ding Yumei, such as houses, cash, stocks, land, property, private jets, etc. The reason why Huang Lichong came to such a judgment is that Xu Jiayin has too many debt disputes, even if he has assets in his name, he has been sued by creditors to freeze them, or they have been transferred due to debt disputes.

Moreover, since 2021, Xu Jiayin has used his personal property to "pledge" and "sell" his personal property (including 3 villas in Hong Kong, luxury houses in Guangzhou and Shenzhen, and several private jets), and the money he exchanged for some rigid operating costs. For example, House B, No. 10 Bulli Trail, The Peak, Hong Kong, which had just been taken over by a buyer for about HK$470 million, was once owned by Hui Ka-yin or related persons.

Although Xu Jiayin has assets overseas, many countries place a high priority on protecting private property. Some countries explicitly provide for the rights and protection of private property in their constitutions or laws. Countries such as the United States, Canada, Australia, and Singapore have been particularly strong in protecting private property. "If you want to prove it, it's very difficult to cross borders." Huang Lichong said.

In fact, after the Evergrande Group thunderstorm, it was rumored in the market that Xu Jiayin and Ding Yumei transferred some assets overseas through "technical divorce". According to reports from the financial circles, since its listing in 2009, Evergrande Group has paid a cumulative dividend of 73.3 billion yuan, and the Xu Jiayin family, which holds nearly 70% of the equity of Evergrande Group all year round, has cashed out at least 50 billion yuan in dividends over the years.

"How much money she (Ding Yumei) took is a guess. After all, Evergrande usually transfers the money away and invests it back into the creditor's rights. For example, US dollar bonds. After the Evergrande thunderstorm, the dollar debt will not be repaid. Huang Lichong told "City Boundary". Taking 10,000 steps back, Ding Yumei is really as rumored by the outside world, with a lot of cash abroad, will she take out 47 million yuan to pay the fine for her ex-husband Xu Jiayin? There is no way to know about this question.

Xu Jiayin has two sons, the eldest son Xu Zhijian graduated from Tsinghua University and was responsible for the management of Evergrande Group's property and garden. Xu Tenghe is a "returnee" from Harvard University, who has participated in many businesses of Evergrande Company, he has served as the chairman of Evergrande Group Pearl River Delta Company for many years, and has also been responsible for the important work of Evergrande Wealth.

However, according to the "Daily Economic News", before Xu Jiayin was taken coercive measures, his youngest son Xu Tenghe had already been taken away. Until February 26, 2024, Ding Yumei filed a lawsuit in the High Court of Hong Kong to recover a debt of HK$1 billion from herself and Xu Tenghe. The market view generally believes that Ding Yumei looks like she is collecting debts on the surface, but in fact, she is probably helping Xu Tenghe escape debts.

This makes things confusing.

03. "When will I get my money back?" ”

One thing Huang Lichong can be sure of is that Evergrande Real Estate is difficult to pay off the fine of 4.175 billion yuan. Because, after the thunderstorm of Evergrande Group, as one of the important subsidiaries, the assets of Evergrande Real Estate have also been divided by various creditors.

Evergrande Real Estate's assets are divided into two types: secured and unmortgaged. It is easy to understand that there is a mortgage, such as the aforementioned House B at 10 Bulli Path on The Peak, Hong Kong, which was mortgaged to CCB Asia. Assets that have not been mortgaged, such as houses, land, vehicles, etc. in the name of the company, are usually sued by the engineering team and suppliers in the court after the Evergrande thunderstorm, and then the court will enforce these assets.

"Evergrande has been mortgaged since the crisis, and everything that can be mortgaged has been mortgaged. The rest are things that don't have any collateral value. Since there is no collateral value, it is almost always worthless. Huang Lichong thinks. This statement has also been corroborated by the "city boundary" from suppliers.

Many suppliers find that they cannot find enforceable assets when they collect debts. Either it was frozen, or it was preemptively taken by other creditors. The rest, all that is the sales office, the desks, chairs, and so on in the office.

Tianyancha legal litigation information shows that from May 23rd to 24th, Evergrande Real Estate Group Co., Ltd. added 4 pieces of information on the person subject to execution, with a total of more than 984 million yuan in the subject matter of enforcement, involving financial loan contract disputes and private lending disputes. Some of the persons subject to enforcement in the case also include Evergrande Group Co., Ltd., Evergrande Real Estate Group (Shenzhen) Co., Ltd., etc.

According to the risk information, Evergrande Real Estate Group Co., Ltd. has more than 790 pieces of information on persons subject to execution, with a total amount of more than 72.5 billion yuan. In addition, the company also has a number of consumption restriction orders and information on judgment defaulters (commonly known as Lao Lai). This also means that the fine of 4.175 billion yuan for Evergrande Real Estate may be difficult for the CSRC to get.

"In the event that Evergrande Real Estate was unable to repay, the SFC became a creditor at the time of liquidation and took away the assets of Evergrande Real Estate that were auctioned. Generally, such penalties have priority over unsecured claims. Huang Lichong once again emphasized to the "city boundary".

Fortunately, Evergrande's work to ensure the delivery of the building has been carried out in an orderly manner. The person in charge of Evergrande Real Estate told the media that the company is still making every effort to promote key tasks such as ensuring the delivery of buildings, and more than 80% of the projects have been completed nationwide. "I left my job a month ago, and the Evergrande building in my city has been delivered, and the engineering team has been disbanded on the spot." A former employee of Evergrande, who is responsible for ensuring the delivery of the building, told "City Boundary".

In addition to Evergrande Real Estate, Xu Jiayin, and Baojiao Building, there are many other sectors under Evergrande Group, and only Evergrande Property and Evergrande Automobile seem to be able to set off a little ripple in the market.

On May 27, Evergrande Property opened 12.66% higher at HK$0.89. The market view is that this may be driven by the resumption of trading of Evergrande Automobile. Due to a severe shortage of funds, Evergrande Automobile stopped production at the beginning of this year, suspended trading on May 17 due to waiting for the publication of inside information, and resumed trading on May 27 with a higher opening of 94.74%.

Behind this is the positive news released by Evergrande Automobile on May 26: 3.145 billion potential shares for sale will be acquired immediately, and 3.203 billion potential shares for sale will become the subject of an exercisable option for potential buyers within a certain period of time after the date of the sale and purchase agreement. "The person who buys the equity of Evergrande Auto is likely to be a creditor. Because if no one buys it, he won't get all his claims back. It's better to add a little more money, gain the initiative, and see if there is a chance to reorganize. Huang Li rushed to the "city boundary" analysis and pointed out.

However, in the past few days, the outside world has speculated that this potential buyer is "Xiaomi". In the stock bar group of Evergrande Automobile, a group of shareholders enthusiastically discussed the information, and many people were excited. They are extremely eager for this potential buyer to be Xiaomi, after all, no matter who has deep financial resources, few companies can fight Xiaomi. "It shouldn't be groundless. According to the current production capacity of Xiaomi Automobile, it is urgent to expand the production capacity of the factory, in fact, the acquisition of several suspended factories of Evergrande Automobile for transformation can achieve capacity expansion. A shareholder left a message.

It's a pity that things soon became clear. On May 30, Xiaomi refuted the rumors on its official account, "Xiaomi Auto has never had plans and moves to acquire or control Evergrande Automobile." This disappointed Evergrande auto shareholders who almost believed it, "When will it be untied!" On the other hand, Evergrande Auto's creditors also complained on social platforms, "When will I get my money back?" ”

There are also more insiders who have been involved in it by Evergrande. For example, suppliers, such as some people who still haven't got Evergrande houses. They stood in the pit that Xu Jiayin had dug for them, helpless and confused.

(Song Xiang and Xu Feng are pseudonyms in the article.) ）

(Author |.) Tao Ting, Editor | Sun Chunfang)

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