Developer Kaisa lures ex-ECM banker for finance role

The first Chinese developer to default on its offshore debt is steadily getting back on its feet. It's now brought in a former Deutsche banker to lead its financial operations.

Kaisa Group, which earned notoriety in January 2015 as the first Chinese developer to default on its offshore debt, once seemed an unlikely destination for a high-flying banker.

However three and a half years on, the company has managed to lure Edward Lau Fu-keung, most recently of Deutsche Bank, to take over as chief financial officer from the departing Habibullah Abdul Rahman.

It underlines the turnaround at Kaisa, which was last year able to return to the bond markets as it put its operations back on a stable footing. It also underlines the growing attraction of the corporate sector to bankers at a time when the investment banking industry is under pressure around the world.

Lau, who will start his new job in June, was a director at the global credit trading team, overseeing loans and structured credit at Deutsche in Hong Kong.

In a statement to the Hong Kong stock exchange on Monday, Kaisa said Lau, 38, would oversee the group’s corporate finance, investment and capital management. Lau has more than 15 years of experience in the capital market, including a seven-year stint with Barclay’s equity capital markets team between 2010 and 2017.  

Kaisa said its financial controller, Kwok-leung Yu, has agreed to take on the CFO role on an interim basis, and Rahman, who joined the company in May 2015, had left the group last week.  

For the financial community in Asia, Kaisa became a notorious name in late 2014, when Chinese regulators blocked the sale of some of its property projects in its hometown of Shenzhen, citing irregularities. That led the company to default on a loan and fail to meet bond payments, wile its former chairman was briefly detained by regulators.

Some of its US dollar bonds plunged to as little as 50/60 cents on the dollar in 2015, reflecting investors' worries over its prospects and how much the creditors would receive from a liquidation once the company filed for a bankruptcy.

In fact, those worries proved to be overstated, in part due to rising land prices in China.

After a two-year trading halt until March 2017, the company belatedly issued its 2014 and 2015 annual reports, and interim reports for 2015 and 2016. On the first day of trading, the shares of Kaisa jumped 85% and the group sold $3 billion of bonds last year.

In its latest 2017 financial results released in March, overall revenue at Kaisa rose 84% year-on-year to Rmb32.8 billion in 2017, driven by a 50% increase in its contracted sales for the same period.

Meanwhile, the departure of Lau makes him the latest in a series of senior figures to opt for a career outside banking.

Also heading to the property industry is Citi veteran Weber Lo, now with Hang Lung Properties. Start-ups are also a popular choice, with JP Morgan’s chairman of Asia-Pacific investment banking, Brian Gu moving to electric car venture XPENG, an Alibaba-backed startup.

¬ Haymarket Media Limited. All rights reserved.
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