HONG KONG: Hong Kong’s High Court on Wednesday rejected a request by the lawyer for Evergrande founder Hui Ka Yan to use funds controlled by liquidators to cover HK$1.2 million ($153,039) in legal costs.
The liquidators, who also serve as court-appointed receivers of Hui’s personal assets, are seeking to recover about $6 billion in dividends and remuneration allegedly paid to Hui and other former Evergrande executives.
Evergrande, once China’s largest property developer, defaulted on most of its roughly $300 billion in liabilities and became a major symbol of the country’s prolonged property-sector crisis.
The court decision comes shortly after Hui, 67, was sentenced to life imprisonment by a Chinese court, which also ordered the confiscation of his personal property.
Hui’s lawyer told the Hong Kong court that his legal team had not received the full Chinese judgment and was therefore unclear about how the confiscation order would affect the Hong Kong proceedings. She also said Hui had been barred by authorities from discussing his assets.
The confiscation has raised concerns among offshore creditors over potential implications for debt recovery and the liquidation process. However, Shanghai-based lawyer Xinpeng Zhu said he expected the impact to be limited, noting that creditors’ rights would generally rank ahead of criminal fines in liquidation proceedings.
The Hong Kong High Court ordered Evergrande into liquidation in 2024 and appointed Alvarez & Marsal executives Edward Middleton and Tiffany Wong as liquidators.
Separately, the liquidators are seeking 57 billion yuan ($8.5 billion) in damages from PwC, alleging negligence in its auditing work for Evergrande.