Featured Image Credit: STR/AFP via Getty Images Nora Tam/South China Morning Post via Getty Images
Topics: Business, China, News, World News, Money
Kit Roberts
Topics: Business, China, News, World News, Money
A businessman has seen his net worth drop by an enormous 98% as his company faces increasing difficulties.
Hui Ka Yan is the founder of Evergrande, formerly one of the largest property developers in China.
This left the businessman as the second richest person in Asia at one point, with his net worth in 2017 being listed at an eye-watering $42 billion.
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Now, things aren't looking so rosy.
Evergrande has faced mounting difficulties amid a meltdown in China's real estate market. This saw the share price of Evergrande plummet, along with Hui's net worth.
The company has had some big swings in its share price on the Hong Kong Stock Exchange.
This comes as Evergrande has been bogged down in a liquidity crisis since 2021, with a number of factors, including $300 billion of debt by the end of 2022, prompting it to file for bankruptcy protection in the US.
One of the company's subsidiaries was also ordered to pay $1.08 billion to a guarantor for failing to honor debt obligations last year.
If that wasn't bad enough, the company has found itself in legal hot water too after Hui was placed under police surveillance.
Evergrande said in a statement that Hui 'has been subject to mandatory measures in accordance with the law due to suspicion of illegal crimes' - without going into any further detail.
Naturally, all this hasn't done wonders for Hui's personal fortune.
He is now worth $979 million, a 98 percent drop from his former wealth, and lost his status as a billionaire.
That said, he'll probably still be able to get by.
The share price of Evergrande rose by 0.4 percent on Wednesday at 10.05am in Hong Kong, but is still down by some 84 percent this year at the time of writing.
It comes as China experiences a long term crisis in its real estate sector due to a combination of factors, including slowing population growth.
The sector has been a lynchpin of China's economy, and has already had an impact on the country's growth.
If Evergrande goes under, it could have a catastrophic impact on the Chinese economy.
People could lose deposits on property that will never be constructed and construction and design firms that did work for Evergrande could be majorly out of pocket too.
All in all, Hui's personal fortunate is perhaps the least of our concerns at the moment.