Two days ago, Evergrande Motors suddenly issued an announcement stating that the company’s executive director Liu Yongzhuo had been criminally detained in accordance with the law on suspicion of illegal crimes. In addition, Evergrande Auto also stated that it has applied to the Stock Exchange to resume trading of shares from 1:00 pm on January 8, 2024. After seeing this news, I believe many people will be confused as to why Evergrande closed its doors, why Evergrande Automobile has not closed down, and what is Liu Yongzhuo’s background.
Regarding the first question, Evergrande is currently experiencing a thunderstorm and has not gone bankrupt, nor can it go bankrupt. Because once Evergrande enters the bankruptcy liquidation process, the assets in hand will be like a drop in the bucket in the face of debts, and the money and housing of countless financial institutions, suppliers, and business owners will really be hopeless. Evergrande Automobile is Evergrande’s current “best” asset, so it cannot fail.
Of course, the issue about Evergrande is not the focus of this article, Liu Yongzhuo is.
As a figure second only to Xu Jiayin in the history of Evergrande, Liu Yongzhuo’s career is worth mentioning. From an ordinary employee to the vice president of the group, from being in charge of cultural industry, agriculture and animal husbandry industry, to being in charge of financial industry and high-tech industry.
Evergrande Automobile, life or death is unpredictable
In 2020, Evergrande Automobile released the first six models of its brand Hengchi, announcing its official entry into the automobile industry.
Also in this year, Liu Yongzhuo, a layman in the automobile industry, was officially appointed as executive director and vice chairman of China Evergrande New Energy Automobile Group Co., Ltd. Interestingly, Liu Yongzhuo, who knew nothing about cars, was also labeled as the "Dean of the Vehicle Research Institute."
Under the leadership of "Dean Liu", Evergrande Automobile has naturally entered the road of loss.
From 2020 to 2022, Evergrande Automobile suffered a cumulative loss of 91.673 billion yuan. As of the end of 2022, Evergrande Automobile has become insolvent, with a total of approximately 11.626 billion yuan in unpaid due debts and a total of approximately 18.512 billion yuan in overdue commercial bills. In contrast, Li Bin's NIO has only "only" lost about 80 billion in six years since its establishment.
However, compared with Evergrande's two trillion, Liu Yongzhuo, who has seen big storms, does not seem to take Evergrande's hundreds of billions of losses to heart.
After taking over Evergrande Automobile, Liu Yongzhuo said a lot of golden words in interviews with the media. For example, in July 2022, Liu Yongzhuo said at the pre-sale press conference that Hengchi 5 is "the best pure electric SUV within 300,000 yuan." After the meeting, Liu Yongzhuo said: "The market response to Hengchi 5 has been very good, exceeding expectations, and its success is a foregone conclusion."
Liu Yongzhuo's full confidence amused netizens. Many netizens said that Liu Yongzhuo did not directly say that Hengchi 5 was a big seller, but he might have said that Evergrande Auto was a "big seller".
In fact, even if it is trapped in a quagmire of losses and unable to extricate itself, under the leadership of Liu Yongzhuo, Evergrande Motors still has a chance to be "reborn". But things didn't go as planned. After Xu Jiayin, the group's top leader, came in, Liu Yongzhuo, the second-in-command, found it even more difficult to turn things around.
In August 2023, Evergrande Automobile announced that it had received an investment of approximately US$500 million from Newton Group. Although this amount of money is not much in the automobile industry, it is enough to solve the problem of Evergrande Automobile, which is in trouble. But just one month later, coercive measures were suddenly taken against Xu Jiayin, so the subsequent funds from the "Middle East Rich Man" could not arrive in time.
Newton Group said that in view of the recent series of changes in China Evergrande Group, it will bring significant uncertainty to the share subscription agreement and the proposed transaction. Under this circumstance, Newton Group suspended the performance of relevant obligations in the share subscription agreement, and Newton (Zhejiang) Automobile Co., Ltd. suspended the second and third payments of funds to Evergrande New Energy Vehicle (Tianjin) Co., Ltd.
Although Evergrande Motors expressed wishful thinking that it is still negotiating, no matter whether a new agreement can be reached later, Liu Yongzhuo, as the leader, will never have a chance to regain his strength.
It is understood that Liu Yongzhuo last appeared in public on December 26, 2023. On this day, a delivery ceremony for Hengchi Automobile's major customers was held at the Tianjin production base. Liu Yongzhuo attended and said that the delivery volume of Hengchi 5 has steadily increased in the past year, but he did not disclose the specific delivery volume.
Now, with the arrest of Liu Yongzhuo, Evergrande Motors, which has successively lost its "life-saving money" and "backbone", is in a state of uncertainty.
Evergrande Football, a surprising statement
Although he said a lot of golden words during his time in charge of Evergrande Automobile, Liu Yongzhuo was already low-key enough compared to the past.
In 2003, Liu Yongzhuo joined Evergrande Group, perhaps because he was an alumnus or had other relationships, such as brother-in-law or teacher-student relationship. In short, after entering Evergrande, Xu Jiayin particularly valued Liu Yongzhuo. It is precisely because of this that Liu Yongzhuo has been promoted in Evergrande and has held important positions many times.
Judging from his resume, Liu Yongzhuo has been in charge of many "Evergrande" companies such as Evergrande Cultural Industry Group, Evergrande Agriculture and Animal Husbandry Group, Evergrande Internet Finance Group, Evergrande High-Tech Group, etc. It can be said that except for Evergrande's main real estate segment, Liu Yongzhuo has been in charge of almost all Evergrande's businesses.
However, the career that really made Liu Yongzhuo famous was during his time at the helm of Evergrande Football. In 2010, Evergrande officially entered the football world, and Liu Yongzhuo served as the chairman of Evergrande Football Club. In his football career, Liu Yongzhuo fully demonstrated his "talent".
After taking charge of Evergrande Football, Liu Yongzhuo not only invited Lippi to join him, making it the first time for a Chinese club to win the Champions League and the World Cup, but also led Evergrande Football Club to win the Chinese Football Super League championship for seven consecutive years. In addition, in 2013 and 2015, it won the Asian Championship twice.
In November 2015, with Liu Yongzhuo's push, Evergrande Football Club was successfully listed on the New Third Board of the stock market and officially listed for trading, making Evergrande Football the number one football stock in Asia.
At the 2016 Football Association Cup championship celebration banquet, Liu Yongzhuo said arrogantly: "You can't snatch the domestic championship if I don't give it to you!"
One stone stirred up a thousand waves. These words made Liu Yongzhuo a popular figure among fans, and Liu Yongzhuo was also dubbed the "Father of Evergrande Football". However, Liu Yongzhuo's "bold words" also attracted ridicule from some fans. In the eyes of many fans, the honor of Evergrande Football is just bought.
The words of the fans are not unreasonable. According to a previous article in "Football News", as of September 2020, Guangzhou Evergrande has invested as much as 13 billion yuan in football. It can be said that Evergrande has used money to create an era of gold-dollar football. However, this money cannot be entirely attributed to Liu Yongzhuo.
In 2015, Liu Yongzhuo was entrusted with a new important task by Xu Jiayin. He resigned as chairman of Evergrande Football Club and began to take charge of the already half-dead Evergrande Ice Spring. But after taking over Evergrande Bingquan, Liu Yongzhuo failed to get Evergrande Bingquan out of trouble. After a lot of trouble, Evergrande Bingquan finally became history.
Although he failed to help Evergrande Ice Spring, Xu Jiayin still prefers Liu Yongzhuo. In 2020, Evergrande's huge debt crisis has been revealed. As the hope of a final comeback, Liu Yongzhuo has taken the lead. But mineral water and cars are not football. Liu Yongzhuo does not have that love, nor the ability to turn things around.
In the past 20 years from 2003 to 2023, Liu Yongzhuo has witnessed the rise of Evergrande and its collapse. But as Evergrande's capable general and Xu Jiayin's "right-hand man", Liu Yongzhuo's "loyalty" is visible.
No, in order to meet Xu Jiayin as soon as possible, he also went in.
Under the cover of the nest, there are complete eggs
At present, there is no reliable news on the reason why Liu Yongzhuo joined, but Liu Yongzhuo’s tenure experience is worth noting.
It is understood that from 2016 to 2018, Liu Yongzhuo was in charge of Evergrande Financial Services when he served as vice president of China Evergrande.
Evergrande Financial Services is the predecessor of Evergrande Financial Wealth Management (Shenzhen) Co., Ltd. It was established in November 2015 and went online in March 2016. At that time, P2P was popular in the country. Evergrande Financial Services is a P2P platform under China Evergrande. However, since 2018, many P2P platforms across the country have exploded, and the industry has been comprehensively rectified. As a result, many products of Evergrande Financial Services have been removed from the shelves.
After the trend changed, Evergrande Financial Services quickly changed its name to Evergrande Wealth, and its leader was replaced by Du Liang, who worked under Liu Yongzhuo. But no matter whether it is a change of name or a change of people, there is actually no essential change. Evergrande Wealth is still a pair of gloves that raise funds for the entire Evergrande, especially in the real estate business.
However, these gloves soon turned into tattered gloves.
On September 8, 2021, Evergrande Wealth announced that it would postpone the payment of the principal of some mature financial products, and hundreds of thousands of investors were involved in China Evergrande’s debt storm. According to statistics from China Evergrande, the total amount of funds raised from the launch of customized financing products to the suspension of sales involved 92.1 billion yuan. As of December 31, 2022, Evergrande Wealth’s unpaid principal and interest totaled approximately 34 billion yuan.
The thunderstorm of Evergrande Wealth quickly attracted widespread attention, and many interested investors reported the case saying that Evergrande Wealth was suspected of "illegal fund-raising." On the evening of September 16, 2023, the Nanshan Branch of the Shenzhen Municipal Public Security Bureau announced that the public security organs had taken criminal coercive measures in accordance with the law against suspected criminals such as Du Liang, the legal representative, executive director and general manager of Evergrande Fortune.
Evergrande Fortune was built by Liu Yongzhuo single-handedly. Du Liang was just a follower. Du Liang got in, so how clean is his boss Liu Yongzhuo?
In fact, it doesn't matter which way you look for the reason why Liu Yongzhuo went in. When the nest is overturned, there are no eggs left. Liu Yongzhuo has worked at Evergrande for twenty years, and is so close to Xu Jiayin. He has also been in charge of multiple group industries. It is absolutely impossible to say that he is clean.
At present, Evergrande executives who have been arrested include Xu Jiayin, chairman of the board of directors of China Evergrande, former president Xia Haijun, former CFO Pan Darong, vice president Xu Tenghe, Evergrande Real Estate President Ke Peng, Evergrande Wealth General Manager Du Liang, former Evergrande Property Chairman Zeng Litao, former Evergrande Life Insurance Chairman Zhu Jialin and others.
The answer to the reason why Liu Yongzhuo entered the company later than the above executives has been presented in the previous article.
Evergrande Automobile is the only hope for "creditors" to get their money back, and it cannot collapse so quickly. However, as the money of the wealthy people in the Middle East disappeared, the last hope of Evergrande Automobile was also shattered.
There is a line in the TV series "Conquest": "If I give you a chance, you will be useless!" Today, Liu Yongzhuo indeed has no need to be "outside".