China Tells Evergrande Founder To Pay Debt With Personal Wealth

China Tells Evergrande Founder To Pay Debt With Personal Wealth

China has an idea for Evergrande. Hui Ka Yan should help pay the company's debt. Out of his personal wealth. It's a novel idea. Billionaires should take responsibility for the behemoths they create. The buck stops here. Literally. "Beijing's directive to the Evergrande founder came after his company missed an initial September 23 deadline for a coupon payment on a dollar bond," Bloomberg reported on Tuesday, citing unnamed sources. Evergrande eventually paid the $83.5 million coupon (green i
Subscribe or log in to read the rest of this content.

5 thoughts on “China Tells Evergrande Founder To Pay Debt With Personal Wealth

  1. I am with Xi on this one.
    The US should have treated the Sackler family (Purdue Pharma) who made billions selling OxyContin and then filed for bankruptcy protection, the same way as Xi is treating Hui.

    1. FWIW, agreed.

      I understand limited liability corporation was a good and worthy invention/innovation that allowed much development. But when one man/family’s wealth is so directly tied with the direction of one company/one conglomerate, I feel personal liability helps making sure capitalism doesn’t turn to outright piracy…

    2. The Purdue Pharma bankruptcy case is the poster child for reforming bankruptcy law. They should all be in broke and in jail for accessory to murder in all 50 states and instead they are rich and getting away with murder as if there is no possible way they could have ever been held accountable. It’s called LIMITED liability, not NO liability!

  2. My speculation on how this plays out: founder selflessly services Evergrande’s coupon payments while getting partly recompensed from hoped-for rise in Evergrande’s share price.

    This buys time to hive off the parts of Evergrande that look attractive in the new CCP-run China (property management? EV?), and to complete some developments, sell assets (land, etc), renegotiate with debtors that CCP wants to protect, and otherwise stabilize the rest of Evergrande (property development).

    He goes forward with New Evergrande while Legacy Evergrande either settles into life as a more cautious developer – maybe with some “social housing” mission – or goes into gradual run-off.

    If this works, Chinese economy will not suffer a messy Evergrande collapse, key domestic interests will be more or less protected, and CCP will be pleased. Oh, and founder avoids disappearing.

Speak your mind

This site uses Akismet to reduce spam. Learn how your comment data is processed.

NEWSROOM crewneck & prints