Xu Jiayin, Ding Yumei, being liquidated!

Xu Jiayin, breaking news. On the evening of August 5th, Evergrande of China announced that it is seeking 60 billion US dollars in dividends and compensation from Xu Jiayin, Ding Yumei, and 7 other defendants, totaling approximately 42.7 billion RMB. Evergrande stated that the legal proceedings of the lawsuit are ongoing, and there is currently uncertainty regarding the likelihood of successful claims and the amount the company may ultimately recover. The incident originated on January 29th this year when the Hong Kong High Court issued an order for the winding-up of Evergrande. Edward Simon Middleton and Wong Wing Sze of Anmai Advisors Limited were appointed as joint and several liquidators of Evergrande on January 29th. Evergrande also suspended trading from January 29, 2024. On March 22nd, the liquidators initiated legal proceedings against Xu Jiayin, Xia Haijun, and former CFO Pan Darong on behalf of the company in the Hong Kong High Court. Subsequently, four more defendants were added to the lawsuit, including Xu Jiayin's spouse or former spouse Ding Yumei, as well as three entities related to Xu Jiayin and Ding Yumei. In the lawsuit, Evergrande seeks to recover dividends and compensation paid in the financial statements for each fiscal year from December 31, 2017, to December 31, 2020, totaling approximately 60 billion US dollars from the seven aforementioned defendants. It is worth noting that Evergrande has been granted multiple injunctions in this lawsuit, restricting Xu Jiayin, Ding Yumei, and Xia Haijun from disposing, selling, or reducing the value of their assets globally to prevent the defendants from transferring assets during the litigation. Furthermore, the injunctions and Hong Kong restraining orders related to the lawsuit were previously subject to confidentiality orders issued by the Hong Kong High Court. However, the confidentiality orders were lifted on August 2, 2024. Industry insiders state that the purpose of the liquidators filing the lawsuit is primarily to protect the interests of creditors and ensure that company assets can be fairly and orderly distributed. With Evergrande Real Estate facing a debt crisis, Xu Jiayin and his "trusted aides" are in trouble. According to financial reports, as of the end of 2022, Evergrande Real Estate's current liabilities were 1.678747 trillion RMB, cash and cash equivalents (including restricted funds) were 9.173 billion RMB. Its total liabilities were 1.833819 trillion RMB, total assets were 1.468557 trillion RMB, indicating insolvency. On March 18th, based on the administrative penalties and prior notice of market entry bans received by Evergrande Real Estate, from 2019 to 2020, Evergrande Real Estate engaged in financial fraud by prematurely recognizing revenue, inflating revenue by 564.146 billion RMB, and inflating profits by 92.011 billion RMB. In September 2023, Xu Jiayin was taken into custody for suspected illegal activities. The China Securities Regulatory Commission previously announced that it had imposed administrative penalties on Evergrande Real Estate for bond issuance fraud and violations of information disclosure laws, imposing a fine of 4.175 billion RMB on Evergrande Real Estate, and imposing the maximum fine of 47 million RMB on Xu Jiayin, the former chairman and actual controller of Evergrande Real Estate, and implementing a lifelong ban from the securities market Xu Jiayin's "right-hand man" also fell one after another. Xia Haijun was publicly reprimanded by the Shenzhen Stock Exchange. On May 13, the Shenzhen Stock Exchange announced that they were unable to contact Xia Haijun. While serving as a director of China Evergrande Group, the controlling shareholder of Evergrande Real Estate Group, Xia Haijun is suspected of violating relevant regulations of the Shenzhen Stock Exchange. The Shenzhen Stock Exchange intends to publicly declare him permanently unsuitable to serve as a director, supervisor, senior management personnel of a bond issuer, and publicly reprimand him. Prior to this, Xia Haijun was also fined 15 million RMB. Pan Darong, former CFO of Evergrande, has been banned from the securities market for 10 years. In response to Evergrande's illegal activities, the China Securities Regulatory Commission warned Pan Darong and imposed a fine of 9 million RMB, as Pan Darong organized and coordinated the falsification of annual financial reports, exhibiting serious misconduct. Xu Jiayin's ex-wife, Ding Yumei, was previously analyzed by the market to have undergone a "technical divorce" with Xu Jiayin to avoid financial risks before the incident. In February of this year, Ding Yumei filed an appeal in the High Court of Hong Kong to recover over 1 billion HKD from Xu Tenghe, Xu Jiayin's second son. According to public information, since its listing in 2009, China Evergrande has distributed a total of 73.386 billion RMB in dividends. Calculated based on Xu Jiayin and his wife's control of approximately 70% of China Evergrande's shares, they may have taken away a total of 50 billion RMB in dividends. Trading of China Evergrande's stock has been suspended since 10:18 am on January 29, 2024 (Monday), and will continue to be suspended until further notice