Update: Founder of Property Services Giant KE Holdings Dies

Zuo Hui (左晖), founder and chairman of New York-listed Chinese residential real estate services giant KE Holdings Inc., died Thursday after an “unexpected worsening of illness,” the company said without providing specifics.

“Our commitment to clients, employees, shareholders and business partners remains as strong as ever, and we will continue to do the right thing even if it’s difficult,” said KE CEO Peng Yongdong in a statement.

The company said its board will make “appropriate arrangements for corporate governance and related matters and make an announcement in due course within two weeks.” Shares of KE, which uses the name Beike Zhaofang in Chinese, were down more than 10% in Thursday pre-market trading on the New York Stock Exchange.

Zuo was just 50 at the time of his death, according to Baidu’s Wikipedia-style Baike website. At that age, he was among a generation that came of age during the early years of China’s reform and opening-up period that included the introduction of private enterprises and a more market-oriented economy.

“Beike has lost a founder who laid the foundation for our cause and mission, and the residential housing industry has lost a leader who has always been exploring and innovating,” Peng said in an internal letter to the company’s employees.

A computer science graduate of Beijing University of Chemical Technology, Zuo founded the first Lianjia real estate brokerage shop two decades ago in Beijing. Now the Lianjia chain has become a fixture in major cities as China developed a more market-oriented private property sector. More recently the company became known for its online Beike platform.

“Lianjia wanted to launch an online platform long ago, and now it’s a natural decision to do so,” Zuo told Caixin before he founded Beike in April 2018, starting a transformation from a physical real estate brokerage chain to an online platform.

In an exclusive interview with Caixin, Zuo said he believed in the development idea of “from heavy to light, from slow to fast, and from difficult to easy,” which means a real estate brokerage has to start with a heavy-asset model by opening more shops and building up listings, and then transform to a light-asset model, open for cooperation and expansion.

At the beginning, Beike drew most of its senior management from Lianjia. The company aimed to establish an independent third-party trading platform, similar to Alibaba Group Holding Ltd.’s Taobao marketplace, with resources open to all real estate intermediary agents including Lianjia.

“Through Beike, Zuo Hui wanted to change the rules of the entire industry,” an executive at Beike told Caixin.

In the early years, real estate agents in China played by the law of the jungle. It was normal for brokers in the same company to compete with each other for deals.

After studying the multiple listing service system in the U.S., Zuo developed an agent cooperation network, consolidating information on real estate transactions, attracting collaboration from different brokers and creating a fair competition platform. As of the end of 2020, a total of 46,900 brokerage companies and 493,000 agents were listed on Beike, according to the company’s annual report.

KE Holdings listed its shares in New York last August. Since then the stock has more than doubled, giving the company a market value of nearly $60 billion. Zuo held 38.8% of KE’s shares and 81.1% of voting rights.

Although Zuo was diagnosed with cancer several years ago, the company never disclosed the chairman’s health information in its regulatory filings, which may raise the risk of allegations of failure to disclose key information, a shareholder said.

Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bobsimison@caixin.com)

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