Creditors line up to wind down Chinese oligarch’s offshore unit to pry loose assets for repaying debt

A group of creditors have applied in Hong Kong to wind down the primary offshore unit of China’s largest private oil conglomerate, owned by fallen oligarch Ye Jianming, as they seek to pry loose the group’s assets to recover their debt.

Harbour Vanguard, a closely held company, filed a petition at the Hong Kong High Court to liquidate Shanghai Huaxin Group (Hong Kong) Lmited, the offshore arm of Ye’s CEFC China Energy Group. The petition, supported by institutional creditors including China Huarong Asset Management, was opposed by Huaxin. The court has set Monday July 30 as the next hearing date.

The liquidation application is the most aggressive step taken by creditors owed a total of 98.3 billion yuan (US$14.5 billion) by CEFC since Ye disappeared from public view in mid-February for what’s believed to be regulatory investigations into his borrowings.

Ye, who turned 41 last month, has not been charged with any crime, and cannot be reached. The daily operations of his sprawling conglomerate - which owned oil and gas assets in China, Africa and eastern Europe - has been taken over since March by China Development Bank (CDB), the country’s largest policy lender and a creditor to as much as 85 per cent of CEFC’s loans.

The law firm Au-Yeung, Cheng, Ho & Tin, representing Huaxin, declined to comment.

Huaxin handles offshore financing and the worldwide collection of information for Ye’s conglomerate, according to a 2017 job advertisement it published in Hong Kong. The company had HK$34 billion (US$4.3 billion) in total assets and HK$30 billion in total liabilities as of June 2017, according to a bond prospectus last year.