Inside the descent into chaos at a Chinese billionaire’s cattle empire

But it was Hui’s bid for S. Kidman & Co, the massive property empire which was eventually acquired by Rinehart and her Chinese partners, and his later purchase of a cattle station portfolio the size of Belgium – part of which was previously owned by prominent businessman Harold Mitchell – that brought him the most attention.

Mitchell had been trying to sell the portfolio, known as the Yougawalla Pastoral Company, for years after separating from his wife. In Hui, he found a deep-pocketed buyer.

Aside from paying $70 million for Mitchell’s portfolio, a company backed by Shimao also bought the Argyle Cattle Company, adding 1 million hectares with the Beefwood Park, Shamrock, Moola Bulla and Mount Amhurst stations. It was financed with $51.5 million from Shimao and a $75 million loan from China Merchants Bank,

Not long after, however, documents filed with the Federal Court show there was a serious falling out between Carol Hui, who had been appointed by her father to oversee his interests in Australia, and Shimao’s early business partner in the venture, Dechang, a Chinese financial group. It was, of course, about money.

Dechang and Dale Champion, the manager of the stations, had removed Carol Hui as a director, and she was suing to have that overturned. The acrimonious dispute showed serious disagreements over how the business was being run.

For a start, Carol Hui felt that difficulties generating cash to repay loans was the fault of Champion, and she wanted him gone. Dechang’s Jing Yuan Xue argued that, in the midst of a crippling drought, it would be a bad idea to remove the manager.

Then, there was the question of more financing. The loan from China Merchants Bank made it hard to get money from another lender given its onerous restrictions. But Xue said he had a preference for a loan from Westpac – which the Federal Court found was partly so that he would not be so beholden to Shimao.

Champion’s evidence to the Federal Court suggested that he believed removing Carol Hui was necessary as she was not responding fast enough to his increasing pleas for help.

“It was my view that without those payments, the operations of the stations would grind to a halt, and I was extremely concerned about the welfare of the animals on the stations,” Champion told the court.

“I was conscious that if animal welfare issues arose, [the] pastoral leases were at risk. This would cause enormous reputational damage and significant financial loss for the investment.”

The stations, Xue alleged in his evidence against Carol Hui, were in a state of “pressing and dire illiquidity”. Suppliers were unhappy, staff salaries were at risk, and there was little money to buy grass and other nutrients for the cattle.

In the end, Federal Court judge Jayne Jagot sided with Carol Hui. If Xue had the best interest of the stations in mind, Justice Jagot said, he would have accepted the loan from Shimao. There wouldn’t have been any issues feeding the cattle then.

Carol Hui was reinstated as a director. Champion left soon after, on his own volition. Justice Jagot also found Champion was not aware that Shimao had made a loan offer in the first place.

Neither Shimao nor the Hui family responded to a request for comment. Champion declined to comment.

In November, The Australian Financial Review reported that one of Canada’s biggest fund managers, Alberta Investment Management Corporation, agreed to buy Hui’s cattle portfolio for $300 million. The billionaire will double his money on the investment if the sale is approved by the Foreign Investment Review Board.

But Hui’s woes are not behind him. Last year, the Financial Review Rich List placed his wealth at $4.9 billion, a remarkable achievement given Shimao’s shares, which are listed in Hong Kong, only resumed trade mid-way through last year after a 16-month halt when it reported billions of dollars in losses.

Shimao began defaulting on its offshore debts, worth more than $US11.7 billion, in 2022. Hui’s company was far from the only Chinese real estate group to have binged on debt and be left with a difficult path out of financial strife.

Evergrande, which has debts of almost $500 billion, narrowly avoided liquidation last month. Another developer, Country Garden, is also struggling with a massive debt burden, selling a major housing project near Melbourne to Singapore’s Fraser Property after a loan default in October.

As Shimao attempted to assure its offshore creditors late last year, it offered up new debt instruments secured by collateral in “key offshore assets”. It is unlikely many of Hui’s Australian assets are among them.

Documents show Hui transferred ownership of his Australian business and agricultural properties from Shimao to his personal British Virgin Islands company, Golden Eagle, in 2021.

At the time, Hui described the Australian business as an unprofitable one, adding its assets were only worth as little as $4 million, and said he took on $99 million in debts in the purchase.

An entity called Sicard now owns the Liverpool Street tower, doubtlessly now worth much more than its $390 million purchase price. That entity’s directors are Hui and his daughter, and it is ultimately owned by an opaque British Virgin Islands company.

Shimao has sold off offshore assets elsewhere, including an office building in London for £315 million ($596 million) in 2022, and creditors will no doubt have their eye on the fate of other assets connected to the Hui family. The businessman, for instance, still owns a majority stake in Bindaree Beef, a major beef processor in Australia, which he bought for more than $100 million.

And, according to his Australian company filings, he still calls Genesis, the mansion overlooking Hong Kong, home.