Real estate billionaires gain from China's move to ease Evergrande crisis

China’s purchase of a stake in a struggling regional bank from China Evergrande Group aimed at preventing contagion is also benefiting Shengjing Bank Co.’s investors, including some poker pals of Evergrande founder Hui Ka Yan. 
 

Evergrande agreed to sell a 20% stake in the bank to the local Shenyang government for 10 billion yuan ($1.55 billion), with the bank demanding that all proceeds go to settle debts with the lender. Shengjing Bank rose 1.4% on Wednesday in Hong Kong on the agreement, even though the sale is unlikely to make a dent in Evergrande’s massive debts to bondholders and homebuyers.  Evergrande dropped 4% Thursday, snapping three days of gains.

 

Recent investors in Shengjing Bank include the following property billionaires that have backed Hui and Evergrande financially.

Cheung Chung Kiu
 

The Chongqing, China-born chairman and founder of Hong Kong-listed company C C Land Holdings Ltd. is a regular player of the Big Two poker game with Hui. Cheung started off buying electronics and other goods in Hong Kong to resell in the mainland, and later moved into property. Today, his C C Land has billions of dollars of property in the U.K., including the “Cheesegrater” skyscraper in London’s financial district. Cheung held direct and indirect minority interests in Shengjing as of June 30, according to the bank’s latest shareholder disclosure.

Cheng family
 

Henry Cheng, chairman of New World Development, is the wealthiest of Hui’s poker pals, with a fortune worth $23.5 billion, according to the Bloomberg Billionaires Index. He is the eldest son of the late Cheng Yu-tung, who fled rural Guangdong to Macau in 1940 ahead of the Japanese occupation, married a goldsmith’s daughter and built a fortune in the property business. The Chengs have invested in Evergrande projects and company shares, including this year’s public offering of Evergrande’s online real estate and automobile marketplaces known as FCB. The family held a minority interest in Shengjing indirectly, according to the report.

Paul Suen
 

Suen was once known as Hong Kong’s “shell king” for having stakes in dozens of small companies as he played the city’s penny stocks. His holdings include a minority stake in Shengjing held directly and indirectly. He has also invested in English football club Birmingham City and London’s Les Ambassadeurs Club, a casino that appears in the James Bond film “Dr. No.” A 2019 disclosure of Suen’s purchase of a stake in Shengjing Bank also showed that he held an interest in Evergrande’s electric-car company at the time, as well as Evergrande bonds.

Karen Lo
 

Lo is a wealthy scion of Hong Kong’s biggest soy-milk dynasty whose real estate holdings range from mansions in Holmby Hills and Malibu, California, to pop star Sting’s former apartment overlooking New York’s Central Park. The University of Pennsylvania graduate, who has held shares of dozens of companies, went from being an investor in Hong Kong-listed fashion company Esprit Holdings Ltd. to its biggest shareholder. Lo has made investments alongside Suen, including a stake in Shengjing from 2019, when they also disclosed interests in Evergrande’s electric-car company. Lo and her partner -- Eugene Chuang, an investor and horse-racing enthusiast -- endowed a professorship in their name at University of Hong Kong. A Sept. 27 Shengjing filing with the Hong Kong exchange shows that Lo no longer has an interest requiring disclosure. 

Lau family
 

Joseph Lau’s Chinese Estates sold its holdings in Shengjing in 2017 to a company owned by his wife, Chan Hoi-wan. Chan later sold those and hasn’t had a notifiable interest in the company since January 2020, according to a filing. The billionaire family of Lau, another of Hui’s poker pals, has also been selling Evergrande shares.