Real estate tycoon Yang Huiyan, the richest woman on the Chinese mainland, has been under great pressure recently after one of her projects became embroiled in a scandal over quality.
Media reports recently said one of the projects of Yang's company Country Garden Holdings Co in Changsha, capital of Hunan province, were found to have serious problems and home buyers could not move in. They have been staying at a nearby hotel for three months.
Immediately after the scandal was exposed, shares in Yang's company on the Hong Kong Stock Exchange slumped by 7.5 percent in two days and Yang saw a HK$2.4 billion ($351.48 million) drop in her wealth overnight.
Compensation was reportedly settled between the company and the home buyers but the incident may mark the beginning of hard times facing Yang and other Chinese property developers as the central government steps up measures to prevent asset bubbles and to cool off the overheated real estate market.
Yang, 28, first came under the spotlight in 2007 when Forbes Magazine ranked her the richest person in China with a net worth of $16.2 billion.
She owes her fortune to the initial public offering (IPO) of Country Garden, a Guangdong-based real estate firm run by her father Yeung Kwok Keung. He transferred 70 percent of the shares to her before the company went public in 2007 and raised $1.7 billion.
Although her wealth rose 75 percent in the past year, Yang's ranking fell to fifth on Forbes Magazine's list of China's richest peope.
Yang's success largely derived from a strategy of focusing on large-scale and high-end property projects in third- and fourth-tier cities. Some industry insiders are questioning the sustainability of Yang's business model. "Last year's recovery of the property market was largely led by projects in the first and second-tier cities," said Xue Jianxiong, an analyst at the Shanghai-based E-house China R&D Institute.
"The situation was not so optimistic in the third- and fourth-tier cities where the relatively slower economic growth may constrain the development potential."
Yang joined the family business in 2005 aged 24. She is the executive director of Country Garden with a net worth of $3.9 billion as of November 2009, overseeing procurement, enterprise resources management and development strategies.
