HONG KONG — A Chinese court on Thursday sentenced Hui Ka Yan, the founder of collapsed property developer China Evergrande Group, to life in prison for financial fraud and bribery, and fined his former companies a combined 15.82 billion yuan ($2.35 billion).
The Shenzhen Intermediate People's Court also confiscated all of Hui's personal property and imposed prison terms of up to 18 years on other senior Evergrande executives, including Hui's two sons. The verdict closes the criminal case against Evergrande's leadership five years after the developer collapsed with more than $300 billion in liabilities, leaving hundreds of unfinished apartment projects across China and helping trigger a downturn in a property sector that once accounted for about a third of the country's gross domestic product.
The verdict
Hui, also known as Xu Jiayin, pleaded guilty in April to charges that included illegal absorption of public deposits, misappropriation of company assets, corporate bribery and fraud. He and his businesses "seriously disrupted" the Chinese property market and caused significant economic losses, the court said, according to the BBC. Evergrande Group was fined 8.82 billion yuan ($1.31 billion) and Evergrande Real Estate Group 7 billion yuan ($1.04 billion), NPR reported. Hui's sons, Xu Zhijian and Xu Tenghe, were among the executives sentenced to prison terms ranging from 22 months to 18 years, according to state media.
Rise and fall
Hui founded Evergrande in 1996 and rode a decade of debt-fueled expansion to a peak stock-market valuation above $50 billion, and was at one point ranked as Asia's richest man. That model came apart in 2020, when Beijing imposed measures to control borrowing in the property sector, cutting Evergrande off from fresh funding and setting off a cash crunch that spread across the industry. The company defaulted on its debts in 2021 and was ordered to liquidate its assets. Its Hong Kong-listed shares, which lost 99 percent of their value, were removed from the exchange last August after more than a decade and a half of trading.
The pre-sale hole
Thursday's ruling puts a criminal frame on findings that regulators in mainland China and Hong Kong first detailed in 2024. Investigators concluded that Evergrande overstated revenues by roughly $80 billion in 2019 and 2020 by booking apartment sales before the units were built and delivered, NPR reported. At Hui's April plea hearing, the Shenzhen court found that pre-sale money paid by home buyers had been "channelled to new property developments" instead of construction, leaving hundreds of unfinished projects, the BBC reported. Hui was already fined $6.5 million and banned from China's capital markets for life in March 2024 for the accounting fraud.
The creditor view
For Chinese home buyers who paid deposits on apartments that were never finished, and for Evergrande's other creditors, Thursday's sentence changes little on its own. A court-supervised liquidation of Evergrande, ordered in January 2024, is still unwinding the developer's assets. And the industry-wide problems Evergrande's collapse helped set in motion — a slump in China's property market that continues to weigh on the world's second-largest economy, with several other major developers still in financial trouble — sit outside the reach of a Shenzhen courtroom.
The verdict leaves the liquidation as the final open front of the Evergrande case, five years after Beijing moved to rein in property-sector debt.