On January 29, China Evergrande was again ** in the High Court of Hong Kong, and the judge formally made a ruling approving the liquidation of Evergrande. This marks that Evergrande, which affects the vital interests of tens of millions of home buyers, has ushered in its own "finale".
For a time, the ending of Xu Jiayin, the fate of Evergrande employees, and the whereabouts of hundreds of thousands of home buyers attracted widespread attention from all walks of life. This article intends to analyze the inside story of Evergrande's collapse and analyze what kind of outcome all parties will face after Evergrande's bankruptcy.
Evergrande has been climbing for 20 years and went bankrupt and liquidated overnight.
When it comes to Evergrande, I believe everyone will be familiar with it. This real estate company is well-known in the industry for its legendary story of "climbing the ladder".
As early as 20 years ago, Evergrande started as a small decoration company, and then quickly expanded to become China's largest real estate company in just a few years. Especially in the past 10 years, Evergrande's growth has shown explosive growth.
Evergrande Group owns well-known enterprises such as Evergrande Real Estate, Evergrande Football, and Evergrande Automobile. Among them, Evergrande Real Estate is mainly engaged in residential development, covering more than 300 large and medium-sized cities across the country; Evergrande Football has defeated international giants for many years in a row and dominated the Chinese football world; Evergrande Automobile is based on the field of new energy vehicles.
It can be said that in just 20 years, Evergrande has completed its leap from scratch and has become one of the most influential real estate companies in China. It is also the masterpiece of Xu Jiayin, a legendary entrepreneur.
But the good times didn't last long, and since 2021, Evergrande has suddenly fallen into an unprecedented crisis. The outside world was the first to notice Evergrande's frequent defaults.
In September 2021, Evergrande announced that it could not pay the principal and interest of the corporate bonds on time. Since then, news of Evergrande's default has continued. Obviously, in 2020, Evergrande also claimed to achieve revenue of nearly 820 billion yuan and profits of more than 70 billion yuan. Within a year, the company was on the verge of bankruptcy.
In 2022, the outside world finally confirmed that the huge debt crushed Evergrande. It is estimated that Evergrande and its affiliates have a total of about 23 trillion yuan of debt repayment pressure. These include bank loans, corporate bonds, and overseas bonds.
The long-term grabbing of financing for crazy expansion finally caused Evergrande to fall from the peak to the trough overnight. In January 2023, the Hong Kong court officially approved the commencement of bankruptcy liquidation proceedings against Evergrande.
It can be said that the history of Evergrande's rise also ended with a bang. Its legend has become a legend in the property market.
Xu Jiayin went from being rich to being imprisoned, and the whereabouts of his ex-wife became a mystery.
This seemingly sudden Evergrande thunderstorm undoubtedly involved Xu Jiayin, the head of Evergrande and a legend in China's real estate industry.
In 2003, Xu Jiayin founded Evergrande Real Estate, starting from a small decoration company. In 20 years, with its superhuman business sense and courage, Evergrande has become the largest real estate developer in China.
In 2021, Evergrande's market value will exceed $330 billion, which once made Xu Jiayin's worth close to Jack Ma and become the richest man in China. The Evergrande empire under his control also makes Xu Jiayin known as the "godfather of real estate".
But the good times did not last long, and as Evergrande fell into trouble, the myth of Xu Jiayin also collapsed. He first lost his status as the largest shareholder, and was taken away by the relevant departments for investigation in September 2023.
The outside world generally believes that Xu Jiayin is the biggest person responsible for the Evergrande crisis. He led Evergrande's highly leveraged and rapidly expanding development route for many years, which led Evergrande to step into a debt trap and eventually escape the fate of bankruptcy.
At present, Xu Jiayin is under investigation on suspicion of a number of economic crimes. The business empire he built collapsed overnight, and he faced dire legal consequences. Xu Jiayin's fall from a huge wealth to the abyss can be described as regrettable.
In addition to Xu Jiayin, his ex-wife Ding Yumei has also received attention from all walks of life. In August 2021, ** disclosed that Xu Jiayin suddenly filed for divorce and divorced his wife Ding Yumei. Then Ding Yumei evaporated with a huge amount of property.
Many people questioned that this was a "technical divorce" designed by Xu Jiayin in order to transfer property and escape debts. It is estimated that Ding Yumei left with at least tens of billions of assets.
Today, Xu Jiayin is in prison, but the whereabouts of his ex-wife are still a mystery. Many creditors are looking for Ms. Ding's whereabouts, hoping to recover her vast wealth of unknown origin. It remains to be seen whether this "Hsu divorce case" can become a legal loophole for the transfer of assets.
Evergrande employees are ill-fated, and the pressure of social security is solid.
In addition to Xu Jiayin and Ding Yumei, another affected group is Evergrande's more than 100,000 employees. What fate will they face?
As the first real estate stock in China, Evergrande Group and its subsidiaries employ more than 1 million people. Most of these employees are from developer Evergrande Real Estate and automaker Evergrande Auto.
With Evergrande in trouble, developers' real estate and car production have been severely affected. A large number of projects have been halted, and car orders have plummeted. The decline in Evergrande's performance has directly led to the income of employees and the imminent unemployment.
In 2022, Evergrande Real Estate laid off nearly 20,000 employees. It is expected that after the bankruptcy liquidation, more large-scale layoffs will be imperative. At the same time, it is also worrying whether employees' social security benefits can be honored.
Industry insiders**, after Evergrande's bankruptcy and liquidation, 30% and 50% of employees will face unemployment. If social security funds are damaged, it will leave a large number of families in dire straits. Whether the survival rights and interests of employees can be guaranteed is a serious issue in front of the company.
There are also owners who are eager to hand over their houses, and there are many problems The third major group affected by Evergrande's collapse is the hundreds of thousands of owners who have not yet delivered their houses. Whether they can get the house delivered for the purchase price is in the spotlight.
According to public data, Evergrande Group has more than 600 undelivered projects under construction across the country. Hundreds of thousands of owners are involved, with an amount of more than 1 trillion yuan.
After the liquidation of Evergrande, how to complete the delivery of these projects has become a social problem. Because once there is a large-scale situation where the owner cannot get the house, it will cause social unrest.
From a legal point of view, after the developer goes bankrupt and liquidates, the owners who have not yet delivered the house enjoy the priority creditor status. In other words, in the process of debt settlement, the developer needs to first complete the obligation to hand over the property to the owner.
However, depending on the construction progress of the project itself and the city where it is located, there are still differences in the difficulty of delivery. First- and second-tier and fast-track projects are relatively easy to complete and deliver. However, many projects in third- and fourth-tier cities, as well as projects with a low degree of development, may have difficulties in handing over in the short term.
In addition, Evergrande Group has nearly 100 project companies. The inconsistencies in the operation and debt status of these project companies will also have different impacts on the delivery of housing.
Industry insiders pointed out that it is necessary to classify and guide the project companies to distinguish different situations to promote the delivery of housing. For some difficult projects, it is necessary to give necessary support to protect the legitimate rights and interests of the majority of owners.
What is the final outcome of Xu Jiayin, the society is looking forward to an explanation.
It can be said that this fierce **, which began in Evergrande but involved the interests of all walks of life, has not yet ended. What people are most concerned about is what kind of outcome Xu Jiayin, the person responsible for the incident, will usher in in the end.
At present, Xu Jiayin is being investigated and collected evidence for serious economic crimes, and there is no time limit. He is expected to be prosecuted and face a long prison sentence.
At the same time, overseas creditors are also actively pursuing the overseas assets of Xu Jiayin and his divorced wife, Ding Yumei. After all, they lost a lot in the collapse of Evergrande. This will also become a huge pressure that Xu Jiayin will not get rid of.
It can be said that Xu Jiayin's fall from the godfather of real estate to being prosecuted and imprisoned is an inevitable result. He has an unshirkable responsibility for the operation of Evergrande. Whether Xu Jiayin can take responsibility for his decision-making will be judged by law and society.
At this point, people are more looking forward to the fact that this real estate storm can give an explanation to the society. Whether it is the loopholes in the legal supervision of the builders, or the deep reasons behind the real estate chaos, an explanation that conforms to the rule of law and fairness and justice is needed.
Only in this way can we prevent the recurrence of tragedies like Evergrande, safeguard the interests of the majority of home buyers, and promote the healthy and stable development of China's real estate market.