A Hong Kong court has ordered the liquidation of Tianji Holding Ltd., a significant subsidiary of China Evergrande Group, marking another legal victory for liquidators seeking to access the assets of the world’s most indebted developer. This ruling makes Tianji the second Evergrande unit to face a wind-up order in just two months, following the liquidation of Evergrande Group itself last year, which became the largest victim of China’s ongoing property crisis. Judge Linda Chan of Hong Kong’s High Court stated that Tianji Holding is evidently insolvent.
Evergrande’s court-approved liquidators are currently navigating the complex structure of the company and addressing legal uncertainties regarding their authority in onshore jurisdictions, where a substantial portion of the developer’s assets are situated. The company’s default in 2021 triggered a wave of unprecedented debt failures among other builders, significantly impacting an economy that had heavily depended on real estate for growth.
Tianji Holding has over 200 subsidiaries registered in the British Virgin Islands, Hong Kong, and mainland China, and it serves as a guarantor for some of the defaulted developer’s dollar notes. The total debt associated with Tianji is approximately 37 billion yuan ($5.1 billion), as reported by the unit’s legal representatives. Recently, a Hong Kong court expedited Tianji’s hearing date, reducing a previously granted delay.
In November, Evergrande liquidators Edward Middleton and Tiffany Wong from Alvarez & Marsal Asia Ltd. submitted the winding-up petition against Tianji Holding. Additionally, the liquidators are pursuing the recovery of $6 billion in dividends and compensation distributed to seven individuals, including the developer’s founder, Hui Ka Yan. They have also initiated legal action against the builder’s auditors and real estate service firms regarding valuation reports they provided for Evergrande and its subsidiaries in previous years.
