By Clare Jim
HONG KONG (Reuters) -Born into a peasant family in rural China, Yeung Kwok Keung’s rags-to-riches tale inspired millions across the country until his Country Garden empire spiralled into crisis this year.
On his home turf, Yeung and his company had many nicknames, among them “The most grassroots tycoon” and the “Universe’s No.1 property developer”.
But in a rapid turn of events, a $15 million coupon payment deadline for the once-revered company expired on Tuesday without word of payment, fuelling expectations that China’s biggest private property developer has defaulted on its offshore debt.
Born in 1955, Yeung founded Country Garden along with four others in 1992, quickly building its scale across China and transforming it into a household name by the early 2000s.
In a country where staying humble and a low profile are seen to be synonymous with success, Yeung played it by the book even after his company became one of China’s largest.
“I was a peasant and have studied very little. I don’t understand a lot of things and I’m a dumb person,” Yeung was quoted as saying to government officials by former company chief financial officer Wu Jianbin in his book. “I have no background, and I resolutely refuse to do illegal things.”
Yeung often told people, including in company meetings, he had not worn shoes before the age of 18, sources told Reuters, declining to be identified due to the sensitivity of the matter.
In a joint webpage with state-owned media Xinhua in 2012, Yeung was described as having suits “always a size too big, he usually sits in a normal domestic Volkswagen, and lives a very frugal life”.
He would be mistaken as a “middle-aged contractor” in construction sites because of how he dressed, Xinhua added.
STRONG TIES WITH AUTHORITIES
Based in Foshan, a second-tier city in southern Guangdong province, Country Garden was China’s largest developer by sales in 2021 and 2022, overtaking China Evergrande Group, which is now at the centre of the property sector’s debt crisis.
Focusing on less popular, smaller cities in the world’s second-largest economy was what made Country Garden successful, as the world’s second-largest economy urbanised.
Famous for its slogans “five-star living for you” and “one can live in a villa for just 500,000 yuan ($68,386.36)” in the early days of its business, the developer built scale by acquiring cheaper and vast amounts of land from local governments, demonstrating Yeung’s strong ties with authorities.
In return, it built multi-purpose developments that included hotels, shops, schools, and often tech parks over the past decade, which in turn helped the economic performance of the local city governments.
Yeung was often promoted as a top philanthropist in China, having, according to Country Garden, donated over 10 billion yuan ($1.37 billion) through his own charity in the past decade to education and poverty alleviation. He has also sponsored the elderly to watch Chinese operas, Xinhua said.
Yeung’s family’s current net worth is $3.8 billion, according to Forbes. Yeung did not immediately respond to a request for comment made through the company.
Country Garden was considered a poster child in the industry before its liquidity stress became public this summer. A stifling cash squeeze saw it join a growing list of Chinese developers struggling to stay afloat under a mountain of debt.
Early this year, Yeung ordered that a wartime movie be played in a monthly meeting with senior managers, telling staff that they had to unite and fight in the face of the current debt crisis, a former employee said.
He appeared to take the lead in that fight. Yeung recently loaned the company $300 million interest-free and was also trying to sell his private jets, local media reported last week.
While Yeung handed over the chairman’s post to his daughter, Yang Huiyan, in March, he remains a driving force behind the company in his role as special adviser.
In a company statement in August, Yeung spelt out a number of attributes that he said make “The Country Garden that I dream of”, some of which will be key amid the crippling cash crisis.
“This is a company of reason, always willing to correct itself,” he said. “This is a company that knows how to win, how to learn from experience, and apply what it learns.”
($1 = 7.3106 Chinese yuan renminbi)
(Reporting by Clare Jim; Additional reporting by Dorothy Kam; Editing by Anne Marie Roantree and Muralikumar Anantharaman)