Business

Evergrande founder loses $25bn as Xi crackdown hits big tycoons

The net worth of Hui Ka Yan, founder of the debt-stricken Evergrande real estate group, declined by $25bn over the past year, exposing the toll President Xi Jinping’s regulatory crackdowns are taking on China’s greatest personal fortunes.

According to the annual Hurun Rich List, published on Wednesday, Hui’s net worth has fallen almost 70 per cent to $11.3bn since 2020, making him China’s 70th richest person. He ranked as the country’s fifth richest person last year and topped the list four years ago.

Zhong Shanshan, a 67-year-old bottled water baron, was ranked China’s richest person with a fortune estimated at just over $60bn.

Evergrande has been the most prominent casualty of a Chinese government drive to reduce debt levels and rein in soaring property prices — an important objective of Xi’s recent policy drive to reduce social inequity and promote “common prosperity” as he prepares to begin a third term in power next year.

Evergrande owes retail investors, suppliers and other creditors more than $300bn and narrowly averted a formal default last week. Over the past year, the group’s Hong Kong-traded shares have fallen more than 80 per cent, drastically reducing Hui’s net worth.

Xi’s regulatory offensive began in November 2020 with the cancellation of a $37bn initial public offering by Jack Ma’s online finance company, Ant Group, and initially targeted alleged monopoly abuses at the country’s largest tech companies. Alibaba, Ma’s ecommerce platform, was fined $2.8bn for alleged abuses in April.

Since Ant’s IPO was blocked, the net worth of Ma, who was ranked at the top of last year’s Hurun Rich List, has fallen 36 per cent to $39.6bn. The fortune of Pony Ma, head of Ant rival Tencent, was down almost 20 per cent over the same period to $49bn.

Chinese technology shares have, however, begun to rebound over recent weeks after Jack Ma made his first overseas trip since the Ant IPO debacle, with investors betting that the government is finally relaxing its scrutiny of the sector.

Previously a ubiquitous figure at Davos and other high-profile international conferences, Jack Ma has made only a handful of brief public appearances in China this year.

The severity of the recent crackdowns on property, technology and education groups has reduced investor appetite for Chinese corporate shares and bonds. But Rupert Hoogewerf, Hurun founder, argued that despite the relentlessly negative headlines, China’s private sector remained extremely dynamic with 307 more dollar billionaires emerging over the past year.

“Half of this year’s list are new faces compared with five years ago, showing the dynamism of China’s private sector,” Hoogewerf said. “New sectors and business models are changing the landscape,” he added, pointing to the surging wealth of new-energy tycoons in the electric vehicle, solar and mining sectors.

The Hurun Rich List tracks the fortunes of 2,918 people each with a net worth of at least Rmb2bn ($310m). Over the past year, the total wealth of people on the list increased 24 per cent to $5.3tn.


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