HONG KONG — Mingling with power brokers at celebrations to mark the centenary of the Chinese Communist Party on July 1, a beaming Hui Ka Yan showed no signs that his company, China Evergrande, was facing mounting pressure with debt repayments.
Hui, wearing a navy-blue suit and open-neck shirt, looked relaxed as he stood on a podium overlooking the festivities in Tiananmen Square, an invitation many considered a show of support for the billionaire businessman.
A month earlier, the Evergrande group chairman had hosted a rare meeting with more than 1,000 suppliers and was once again flanked by the business elite, as he spoke of his deleveraging goals.
But now Hui's highly leveraged business strategy is unravelling. Debts at Evergrande, the country's No. 2 developer, triggered warnings on Aug. 19 from the central bank and regulators worried that its 1.97 trillion yuan ($302 billion) of liabilities - the size of Finland's GDP - could result in contagion if the company was not stabilised. The company warned on Tuesday of default risks if it failed to dispose of more assets and renew loans.
Evergrande and Hui did not respond to requests for comment.
The 62-year-old former steel technician, raised by his grandmother in a rural village in central Henan province, founded Evergrande in 1996 in southern Guangzhou city and built his fortune on the back of low-priced homes.
Under Hui, the property developer expanded aggressively by raising loans to support its land buying sprees and selling homes at lower margins for quick turnover. Evergrande grew to achieve 700 billion yuan in annual sales by 2020.
In 2017, Hui was Asia's richest man with a net worth of $45.3 billion according to Forbes. Today his net worth is estimated at $13.4 billion.
Hui keeps a low public profile and is a workaholic, who at times demands that others follow his work style, three employees told Reuters.
He also set ambitious targets; when questioned by investors and reporters in the past decade about his highly leveraged projects, Hui said that Evergrande's high turnover and asset value were sufficient to cover its debts.
Hui did not shy away from new ventures, especially in support of China's larger goals. He dabbled in electric cars and soccer, both a passion of Chinese President Xi Jinping.
Outside mainland China, Hui mixed with Hong Kong tycoons including New World Development's late founder, Cheng Yu Tung, and Chinese Estates Holdings' former chairman, Joseph Lau.
With them, he became a core member of the "poker club", a tight-knit circle of tycoons who often did investment deals together, according to three people familiar with the club.
"He was very composed when he was first brought to the club; he knowingly lost a lot of money in the games and gained the fondness of Cheng," one of the people briefed by the tycoons said.
Cheng injected $150 million into Evergrande a year before its 2009 IPO in Hong Kong, helping it through a crunch during the financial crisis following aggressive expansion, according to Evergrande's listing prospectus.
Chinese Estates has disclosed investments over the years amounting to billions of dollars in the shares and bonds of Evergrande - the largest issuer of dollar junk bonds in Asia. Chinese Estates did not respond to a request for comment.
Hui's highly leveraged businesses are worrying regulators who have warned Evergande to get its house in order.
"He's done everything correct politically but he has also raised so much debt - in an industry the government has warned against excessive borrowing and over speculation," said an analyst who declined to be identified as they are not authorised to speak to media.
Speaking at the 2018 China Charity Awards as a winner for the 8th consecutive year, Hui said Evergrande had paid tax totalling 185 billion yuan in the past 22 years and donated more than 10 billion yuan.
"Without the country's policy to reform higher education, I could not have left the village. Without the country giving me a scholarship of 14 yuan every month, I could not have completed university," Hui said.
"Without the country's good policy to reform and open up, Evergrande would not have what it has today. Therefore, everything that Evergrande and I have, they are all given by the Party, by the country, and by society."