Tycoon Chen Hongtian blames ‘short-term cash-flow disruption’ for seizure of Hong Kong properties including Peak house
- His company, Cheung Kei Group, cites defaults on ‘several big-ticket accounts receivable’ and ‘abnormal obstacles’ for loss of control over assets
- Chen Hongtian’s three core properties in Hong Kong are worth about HK$9.8 billion (US$1.25 billion), company says
Chinese tycoon Chen Hongtian’s company has blamed a “short-term cash-flow disruption” after three of his properties in Hong Kong, including a house on The Peak that he bought for HK$2.1 billion (US$268 million) in 2016, were taken over by creditors.
“Chen Hongtian’s three core properties in Hong Kong are worth about HK$9.8 billion, according to recent appraisal reports commissioned by banks,” Cheung Kei Group said in a statement on Friday, published in the official WeChat account of Shenzhen-based Harmony Club, which is chaired by Chen.
“Although the value of some properties has dropped sharply compared to before the pandemic, it should be slightly higher than the HK$5 billion in loans, and the debt ratio is less than 60 per cent.”
The statement came after Chen’s house, a 9,212 sq ft property at 15 Gough Hill Road, was seized this month by receivers appointed by Bank of East Asia (BEA), according to government records.
In February this year, Bank of Communications appointed receivers for his Opus Hong Kong property, which he bought with Chen Yao Li Ni.
Chen lost control of other assets in the city, including commercial buildings Towers A and B of Cheung Kei Center in Hung Hom. They were mortgaged with Hang Seng Bank in May 2019. The bank appointed receivers to take over the buildings this month.
Chinese tycoon Chen Hongtian has Hong Kong property seized by lenders
“In the past two months, several big-ticket accounts receivable were defaulted off-the-cuff by the other party,” the statement said. “At the same time, the buyer of a big transaction suddenly defaulted a few days before the completion of the transaction, resulting in a related breach of contract.”
In addition, many “normal business processes” in mainland China have encountered “abnormal obstacles”, the company added. “A series of events caused a short-term cash flow disruption. These problems are likely to be properly resolved in a short period of time.”
The company went on to plead for “understanding and support” from “relevant financial institutions and media” to “support enterprises to tide over difficulty” when “the government hopes to revive economic development”.
Receivers of a luxury property on The Peak linked to Evergrande put it up for sale
Harmony Club is a group of about 150 tycoons, mostly based in Shenzhen, who directly or indirectly control more than 70 listed companies and around 3,000 corporate entities.
The club’s executives include Pony Ma Huateng of technology company Tencent, Wang Chuanfu of electric vehicle company BYD and Wang Wei of SF Express, a delivery services and logistics company.
Seller takes US$16.6 million loss on luxury Hong Kong home at The Peak
“The [bids] received for the Black’s Link project have not met the requirements, and we will continue to contact potential buyers for the sale of the mansion,” said Centaline Property Agency, one of the two agencies involved.
Mansion 10B at Black’s Link could be valued at over HK$800 million, given that comparable properties on The Peak are valued at HK$140,000 to HK$150,000 per square foot, a source familiar with the sale process said in early March.
