Saturday, October 16, 2021

Xi Jinping’s jailbird of a property mogul: ‘I have never lifted a finger against my people’

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The billionaire chairman of Chinese property giant Evergrande, jailed for corruption in February, has pledged to return to the company he built over the past 15 years.

Hui Ka Yan, who ran the firm for nine years, said he would become the company’s deputy chairman, an unprecedented move for the unscrupulous, 71-year-old leader. His resume is more likely to be the chairman of a company in mainland China.

Evergrande was once among China’s biggest developers, and its billionaire shareholders included a Chinese princeling named Zhou Hongyi and a former real estate minister Wang Qishan.

The company’s fortunes quickly turned in 2016, when Chinese authorities uncovered its connection to Hong Kong-based Red Granite Pictures, which had produced The Wolf of Wall Street with Leonardo DiCaprio. He was later arrested by Chinese authorities and then jailed for corruption.

The dramatic fall from grace has derailed the company, which was being used by China’s “shareholder brigade” – a vast army of financiers, both local and foreign, hired by senior officials to manipulate share prices by issuing false and misleading information.

In February a private company run by four senior directors at Evergrande crashed, sending its share price crashing with it. In a statement at the time, the chairman said his legal counsel had discovered “unjust accusations” from public agencies.

According to local media reports, private directors at the company have been accused of manipulating the company’s share price by paying a contractor to “delete” unverified allegations on mainland news websites. Private directors have always been liable for the activities of their employees.

Hui said his Hong Kong lawyer advised him to run for the company’s deputy chairman role to focus on the company and stay in Beijing, which he said he has been in contact with from hospital, to oversee the restructuring of the Hong Kong-listed company.

“It may be the darkest moment for Evergrande, but the darkest moment is also a turning point,” he said.

Evergrande’s share price fell on Sunday to its lowest level since 2005, and was down by as much as 10% at one point.

It has lost 88% of its value this year, and had been cited by some analysts as the biggest potential victim of a government crackdown on stocks.

Hui said mainland officials suggested he take over as chairman of Evergrande, then require the company to set up a government trust, which would help to protect its share price and ability to issue bonds.

“The first was a smart move, but the second only hurt our bottom line,” he said. “I did not like that.”

In September an independent committee of Evergrande removed Hui as chairman and chief executive and promoted an executive, Shen Man, to chairman. The committee pointed to Hui’s lavish spending and his “unsavoury” business practices, including falsifying financial records and hiring “hand-picked” investors to influence the share price.

The court of first instance in Guangdong province ordered Hui to pay as much as €294m in costs and fines to the company, as well as his employees’ employees who had taken part in the stock manipulation.

An ongoing stock rally has put Evergrande’s shares on the verge of an initial public offering in Hong Kong and has boosted the value of its assets to more than $70bn.

But Hui said he saw it as “only a band-aid over the wound” and added that he was “deeply troubled” at his company’s troubles.

“I had deep love for this company and its people,” he said. “I have never lifted a finger against my people, and never will. I’ve always practised faith and confidence in my people. I like to do the right thing and am not a hypocrite.”

Hui said he would work with Henan provincial officials, who were involved in the investigation, to ensure that the initial public offering was “correctly” and fairly conducted.

“In the old days, when I was in jail, I thought of Evergrande not as just a company, but as my second family,” he said. “I hope to see Evergrande once again serving the people in the right way.”

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