Yahoo Finance Chinese company demands sale of Evergrande founder's Hong Kong flat in debt dispute
A Chinese firm has demanded that Hui Ka-yan, the founder and former chairman of insolvent developer China Evergrande Group, sell a Hong Kong flat to partially pay off a defaulted 5 billion yuan (US$685 million) debt.
Hexin Hengju Shenzhen Investment Holding Center is demanding the sale of the flat, which it said is fully owned by Hui, through a private treaty or a public auction, according to a summons letter issued by a Hong Kong court on Tuesday.
According to the claim, the High Court had ordered Hui to repay the debt in December last year, but payment had not been received. Hexin has also demanded an additional HK$9,100 (US$1,165) to cover the costs of the charging order, the summons said.
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The sale of the property will be "partial repayment" of the debt owed to Hexin, the summons said.
The property is a flat in Cheung King Mansion on Austin Road in Kowloon. Currently two properties are listed for sale in the building, priced between HK$5 million and HK$6 million, according to property site Midland Realty.
In 2016, Hexin injected 5 billion yuan into Hengda Real Estate, an Evergrande unit, to buy a 1.6 per cent stake. But the deal later fell through as certain obligations were not fulfilled.
In May 2023, a Guangzhou court ordered Evergrande to pay about 6 billion yuan in compensation and damages to settle a dispute with Hexin, part of which was an order by the Chinese court to repurchase the stake in Hengda.
Once China's richest person, Hui's personal wealth has dwindled since Evergrande became enmeshed in a debt crisis.
Liquidators and receivers have been making slow progress unwinding an estimated US$300 billion of liabilities after the developer's liquidation order by the Hong Kong High Court in January.
Recently, a mansion linked to Hui in one of Hong Kong's most exclusive neighbourhoods finally found a buyer after a fire sale and 15 months on the auction block, offering a minor victory for Evergrande's liquidators as they grapple to sell the developer's assets.
The 5,171 sq ft mansion at 10B Black's Link sold at a 44 per cent discount of HK$448 million, according to the Land Registry.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.
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