On August 7, the Hong Kong High Court's Court of First Instance dismissed all applications from the plaintiff, Yingjia International Properties Limited, which sought to prohibit a winding-up petition. The court allowed the defendant, State Hero Holdings Limited, a subsidiary of China Evergrande (in liquidation, formerly stock code: HK03333), to proceed with liquidation proceedings to recover approximately HK$5.97 billion in unpaid loans.

An analysis of the judgment by reporters reveals that Yingjia International Properties Limited (hereinafter referred to as Yingjia) initially treated the loan as a 'bridge loan', believing it would not need to repay Evergrande. However, after Evergrande was ordered into liquidation by the Hong Kong High Court, the liquidator firmly considered it a genuine loan and demanded repayment. Consequently, Yingjia sought an injunction to prevent the liquidator from filing the winding-up petition.

The case involves three companies, all identified by the court as part of the same group. Specifically, Yingjia is wholly owned by Wang Lihua (female); Heyi Rong International Trade Co., Ltd. (hereinafter Heyi Rong) and Hongchang International Trade Co., Ltd. (hereinafter Hongchang) are both controlled by Wang Kaiguo (male). According to written submissions from Yingjia's side, Wang Lihua and Wang Kaiguo are friends and business partners.

On January 24, 2021, Heyi Rong entered into a subscription agreement with Evergrande New Energy Vehicle Group (HK00708, now suspended from trading). Heyi Rong agreed to subscribe for approximately 183 million new shares of Evergrande Auto, with a total price of about HK$5 billion. The subscription was to be completed within three months. That same day, Evergrande Auto announced it had entered into subscription agreements with six subscribers, including Heyi Rong, to issue about 952 million new shares at HK$27.30 per share, raising HK$26 billion. Each subscriber agreed to a 12-month lock-up period for the shares.

In March 2021, Evergrande and Heyi Rong signed a renminbi loan agreement, under which Heyi Rong provided a loan equivalent to approximately HK$5 billion to Evergrande. Between April 7 and 9, 2021, Heyi Rong transferred a total of approximately RMB 4.2 billion to the account of Guangzhou Kailong Real Estate Co., Ltd., designated by Evergrande, in three separate installments. Converted at the exchange rates on each transfer date, the total amount was about HK$5 billion.

Also in March 2021, State Hero Holdings Limited (hereinafter State Hero), a subsidiary of Evergrande, signed a loan agreement with Yingjia. State Hero provided a HK$5 billion loan to Yingjia, with a term of two years. Repayment on time carried no interest, but late payment incurred interest at 4% per annum. Between April 7 and 9, 2021, the funds were transferred in three installments to Yingjia's account. Upon receiving the HK$5 billion, Yingjia immediately transferred the sum to Hongchang.

According to the judgment, citing statements from Yingjia's side, Heyi Rong assigned its rights under the subscription agreement to Hongchang via a tripartite agreement in March 2021. Hongchang then became the final subscriber for the batch of new shares in Evergrande Auto. On April 9, 2021, upon receiving the transfer from Yingjia, Hongchang obtained a stock certificate for approximately 183 million new shares of Evergrande Auto. This reveals a clear cross-border capital loop. While Evergrande lent HK$5 billion in Hong Kong, it simultaneously received equivalent renminbi funds in mainland China. From the transaction structure, this was a typical 'bridge loan' arrangement.

Yingjia argued in the lawsuit that Evergrande's original management and Yingjia had an internal understanding that the loan would not actually need to be repaid. However, when Evergrande was ordered into liquidation by the Hong Kong High Court on January 29, 2024, the liquidator, upon taking over, completely broke this 'understanding' between Evergrande's original management and Yingjia. The liquidator, focusing solely on the written loan agreement, resolutely deemed it a genuine debt. In May 2025, State Hero formally demanded repayment of principal and interest totaling nearly HK$6 billion from Yingjia. Yingjia then sought an injunction to prevent the liquidation petition.

According to the judgment, Yingjia's defense arguments changed multiple times during the litigation, from initially claiming the loan agreement was a 'sham transaction', to citing an 'existing fund arrangement plan', and later asserting an 'oral ancillary agreement not to enforce repayment'. The presiding judge, Madam Justice Chan, concluded that the claimed oral ancillary agreement was 'recently fabricated' and dismissed all of Yingjia's defenses. Chan stated that the signed loan agreement with full fund transfers constitutes a genuine debt, and mere post-hoc unilateral claims of an oral agreement cannot negate the legal validity of a formal contract.

Under the ruling, the plaintiff, Yingjia, not only lost the case but must also pay all costs to the defendant Evergrande liquidator for the originating summons, including hearing fees and all reserved costs, calculated on an indemnity basis at a higher rate of court costs in Hong Kong. This reflects the court's disapproval of the plaintiff's conduct in fabricating the alleged 'collateral agreement' to seek the injunction.