On September 28, Hui Ka Yan, chairman of China Evergrande's board of directors, was taken into custody for alleged illegal activities. Due to prior speculations of a "technical divorce", there are concerns in the market about whether his "spouse" Ding Yumei has distanced herself from Hui's assets.
The National Business Daily learned from insiders that before the announcement of Hui's detention, his second son, Peter Xu, had already been taken away, while Ding Yumei was "abroad."
Upon checking the Hong Kong Companies Registry, it was found that Ding Yumei holds a Canadian passport. On the evening of September 29, the National Business Daily, inquiring as a citizen, learned from the National Immigration Service hotline that if one holds a Canadian passport, they must have naturalized first. However, whether Ding has renounced her Chinese nationality or household registration needs to be verified with the relevant departments.
Financial statements reveal that in 2021, China Evergrande had total assets of approximately 2.1 trillion yuan, total liabilities of 2.58 trillion yuan, and a net asset deficit of about 473.1 billion yuan. In 2022, the total assets were about 1.84 trillion yuan, total liabilities around 2.45 trillion yuan, and a net asset deficit of approximately 599.1 billion yuan.
Deep Involvement in Evergrande Affairs by Second Son
In recent years, Peter Xu has been deeply involved in various Evergrande affairs, holding managerial positions. He served as the chairman of Evergrande Group's Pearl River Delta company for several years and was also responsible for significant tasks at Evergrande Wealth.
On September 16, the "Shenzhen Nanshan Public Security" WeChat account reported that the public security authorities had taken criminal coercive measures against individuals related to Evergrande Financial Wealth Management (Shenzhen) Co., Ltd. "The case is still under further investigation."
On August 31, Evergrande Wealth announced that due to slower-than-expected asset disposal progress and the lack of funds from asset disposals, the company couldn't make payments for the month. Further payment arrangements would be announced separately.
Several former Evergrande employees told the National Business Daily that during Peter Xu's tenure as chairman of the Evergrande Group's Pearl River Delta company, the company could acquire land nationwide without regional restrictions. However, his personal performance was not particularly outstanding.
In December 2021, overseas media reported that Peter Xu sold a mansion on Sunset Boulevard in Los Angeles for $12.5 million. At the end of 2022, Hui Ka Yan listed his luxury London property, Rutland Gate 2-8a, for sale, valued at about 2 billion yuan.
The last time Hui Ka Yan appeared in public was on July 4 of this year, when he chaired a management meeting of the Evergrande Football Club. Since 2023, Hui Ka Yan's two public appearances and statements have been through Evergrande Football.
"Spouse" Ding Yumei Holds Canadian Passport
On August 14, an announcement by Evergrande Auto led to public speculation about Hui Ka Yan's marital status. Ding Yumei, Hui's publicly known spouse, was described in the agreement as "an independent third party unrelated to the company and its associates." She also holds approximately 5.99% of China Evergrande's issued shares.
This led to market speculation that Hui and Ding might have had a "technical divorce."
The National Business Daily claimed that in Evergrande Property's delayed 2022 annual report published in June of this year, Ding Yumei was still referred to as "Mrs. Xu," and her ownership interest was described as "spousal interest," aligning with Hui Ka Yan and XinXin (BVI) Limited as joint actors.
However, in Evergrande Property's mid-2023 report, there was no mention of "Mrs. Xu" or "Ding Yumei."
Can Ding Yumei financially separate from Hui Ka Yan and avoid debt through divorce?
On August 16, Yang Dengji, a lawyer from Guangdong Hebang Law Firm, told the National Business Daily that according to Article 1064 of the Civil Code, debts incurred by both spouses or by one spouse for the daily needs of the family during the marriage are considered joint debts of the couple. Therefore, Ding Yumei, not only as Hui Ka Yan's spouse or "former spouse" but also as his trusted aide in entrepreneurship, cannot completely isolate the risk and avoid the joint debts they incurred during their marriage.
According to a previous report, Hui Ka Yan met Ding Yumei in 1982 when he was assigned to work at the Wuyang Steel Plant in Henan after graduating from college. They married the following year. Over the years, Ding Yumei has rarely appeared in the public market. In December 2018, Hui Ka Yan and Ding Yumei made a high-profile return to their hometown in Henan. This was Ding Yumei's first public appearance. The reporter found that the shareholder of Haobang is a company registered in the British Virgin Islands (BVI).
According to reports, Haobang owns a house at 10 Peak Briley Path, which was mortgaged for a loan. Both Canon Enterprise Limited and Xin rong Limited (registered in the Cayman Islands) are additional guarantors for the loan. At that time, there were frequent rumors that Hui Ka Yan was selling or mortgaging his personal assets, and three properties on Briley Path were mortgaged to China Construction Bank (Asia) and finance company Eurex Asia Capital Limited.
The report said that Xin rong Limited controls Tianxin Holdings Limited, and "Ding Yumei" serves as a shareholder in Tianxin Holdings Limited. The registration information shows that "Ding Yumei" holds a Canadian passport.
It's worth noting that in 2021, XinXin (BVI) Limited, Ding Yumei, and Hui Ka Yan collectively sold 1.2 billion shares of China Evergrande on November 25 at an average price of 2.23 Hong Kong dollars per share, cashing in approximately 26.76 billion Hong Kong dollars.
In the first half of this year, Evergrande achieved a revenue of 128.18 billion yuan, a gross profit of 9.8 billion yuan, an operating loss of 17.38 billion yuan, a non-operating loss (including litigation, land reclamation, equity disposal, and asset valuation impairment) of 15.03 billion yuan, a tax expenditure of 6.84 billion yuan, and a total net loss of 39.25 billion yuan.
