Everything at China Evergrande is under control.
Including billionaire chairman Hui Ka Yan.
Hui, media reports suggested Wednesday, was “taken away” by Xi Jinping’s police at some point this month. He’s not under arrest. Rather, he’s under “police control.”
I imagine that’s a distinction without a difference to Hui. He was taken to an undisclosed location, where he’s obliged to stay. He can’t talk to anyone unless he gets permission first. Again: It’s not a formal arrest, and he hasn’t been charged.
There’s a name for that sort of arrangement. It’s called “kidnapping.” But this isn’t kidnapping. It’s “residential surveillance,” according to China’s Criminal Procedure Law. Either way, it doesn’t sound like a lot of fun, and it could last six months.
The news, originally reported by Bloomberg, comes a little over a week after “relevant personnel” at Evergrande’s Shenzhen-based wealth management unit were subjected to what the company called “criminal coercive measures.”
Evergrande was back above the digital fold late last week when the company’s decision to cancel scheduled creditor meetings unnerved markets anxious for clarity on a fraught restructuring process. The effort hinges on bondholder support for a debt swap. The situation took another foreboding turn on Sunday, when Evergrande said unspecified issues at a subsidiary might mean it can’t even issue new notes.
Now, it looks as though “the saga… has entered a new phase involving the criminal justice system,” as Bloomberg put it, on the way to suggesting Hui may be the Jack Ma of real estate. That sounds like flattery. It’s not. The implication is that Hui’s Icarus trajectory makes him the latest Chinese tycoon wiped out and disappeared by one of Xi’s unsparing crackdowns.
Hui’s political connections run deep, but not deep enough, apparently. Last year, he was shut out of a key Party convention amid Evergrande’s existential spiral.
In October of 2021, after Evergrande missed an initial deadline for a coupon payment on a dollar bond, Beijing suggested Hui help pay the company’s debt — out of his personal wealth.
Hui’s net worth collapsed that year. At his personal peak in 2017, Hui was worth more than $40 billion. Now, just five years later, he’s worth less than $2 billion.
The next question, I suppose, is whether he’s ultimately expelled from the Party. Wish him luck. He’s going to need it. Wherever he is.