Former Partner of Detained Billionaire Sues Evergrande Founder’s Son for Money Amidst Investigation

Beijing, China – A lawsuit has been filed by the former partner of a detained billionaire against Xu Jiayin, the chairman of embattled Chinese property developer Evergrande Group, seeking the repayment of a 200 million yuan ($31 million) loan. The lawsuit claims that Xu owes the money, which includes principal and interest, according to court filings. The case is pending a hearing.

The legal action comes amidst ongoing investigations into Xu and his father’s finances, which could lead to the confiscation of their assets by mainland Chinese courts. This situation has prompted speculation that the lawsuit may serve as a means for Xu to transfer some of his assets to prevent them from being seized.

Evergrande Group, burdened with $328 billion in liabilities, the largest debt of any developer in the world, was ordered by the Hong Kong High Court to liquidate in January, marking the largest such case in the city’s history. The company’s downfall has gained significant attention, making it difficult for the firm and its founder, Hui Ka-yan, to conceal their actions.

Legal experts are divided on the motivations behind the lawsuit. Some believe it may be a genuine attempt to recover the loan, while others argue that it could be a tactic to avoid paying creditors or facilitate the transfer of assets. The final outcome will depend on various factors, including court decisions and Xu’s financial circumstances.

Despite the ongoing legal battle, analysts predict that the matter is unlikely to have a significant impact on the property market. Kenny Wen, the head of strategy at KGI, explained that the liquidation process would primarily affect Evergrande’s shareholders and bondholders. Additionally, the property sector is already aware that recovery may take years, and the market has already priced in these factors.

The loan agreement in question was signed in June 2020 between Ding Shuang and Xu Jiayin, when Evergrande was in the process of raising capital for its property services and vehicle subsidiaries. Xu and several employees of Evergrande’s wealth management arm, which he overseen, were arrested last year. Hui Ka-yan, the founder of Evergrande, was also detained by police in September 2021 for suspected economic crimes.

Evergrande declined to comment on the lawsuit when contacted by the media. This story will continue to unfold as the court considers the case, shedding further light on the financial challenges faced by the company and its key figures.