HONG KONG • Tycoon Pan Sutong has gone from ranking among Asia's richest people to having his firm's flagship skyscraper seized by creditors in just five years.
Mr Pan, 57, was Asia's fourth-wealthiest man in 2015 with a net worth of US$27 billion (S$36 billion), according to a Bloomberg index.
But after shares of his Goldin Financial Holdings plunged and with most of his property tied up as loan collateral, he has fallen off the list of the world's 500 richest people.
His initial wealth came from electronics, which he entered after moving to Hong Kong from California, where he had spent his teens skipping school and hanging out at his family's Chinese restaurants.
He moved to property investing in 2008 amid a boom that would mint many fortunes in Hong Kong and make it one of the world's most expensive real estate markets.
Mr Pan now joins other investors in the city who overextended themselves during the good times, only to be undone by months of civil unrest and the pandemic.
Mr Pan and Goldin Financial racked up around HK$38 billion (S$6.5 billion) of debt between May 2017 and September last year for four Hong Kong properties, according to exchange filings and Bloomberg data. At least US$1 billion remains tied to Goldin.
Goldin's downfall can be traced to Mr Pan's strategy of splitting ownership of properties between the company and his own private interests.
Between 2011 and last year, Mr Pan and Goldin purchased one commercial and two residential properties. Goldin took a 60 per cent stake while Mr Pan eventually held 40 per cent. There was a similar ownership structure for a majority stake in a third residential plot.
But Mr Pan decided in 2018 to take full ownership of one of the residential properties and a majority stake in another.
In turn, he sold his share in the other two assets to his listed firm. These included 40 per cent stakes in Goldin Financial Global Centre, his firm's flagship tower that was saddled with debt, and a pricey site near the old Kai Tak airport.
Mr Pan became sole guarantor for a HK$7.19 billion loan for one of the residential developments, said insiders. At least four banks involved in the loan did not agree to the terms and exited, they said.
The Kai Tak project hit snags. In late 2019, Goldin failed to raise a loan partly to fund development of the site and later sold the plot for about HK$3.5 billion, less than half of what it had paid in 2018.
The firm's Financial Global Centre skyscraper was at the heart of an asset grab by creditors after Goldin failed to service its debt.
Hong Kong's High Court granted the receivers ownership last September. They have since struck an agreement to sell the building.