Hui Ka Yan of Evergrande Sentenced to Life for Financial Fraud

A worker collects trash in a partially shuttered Evergrande commercial complex in Beijing, as the Hong Kong Stock Exchange delisted China Evergrande. This marks a significant moment in Evergrande’s troubled history.

Founder Hui Ka Yan, also known as Xu Jiayin, has received a life sentence for financial misconduct. The Shenzhen Intermediate People’s Court announced this decision on Thursday. The Evergrande companies face fines totaling $2.3 billion. This development is pivotal in the firm’s story, following its collapse with over $300 billion in liabilities after Chinese authorities tightened policies on real estate borrowing in 2020. This led to financial issues for various developers and negatively impacted the broader economy.

The court found Hui and Evergrande guilty of inflating assets and hiding liabilities. Hui abused his position to engage in financial deception and misuse company resources. Several senior executives from Evergrande were also sentenced to prison terms, some lasting up to 18 years, for crimes like illegal deposits and fraud.

Specific fines imposed include 8.82 billion yuan ($1.31 billion) on the Evergrande group, and 7 billion yuan ($1.04 billion) on Evergrande Real Estate Group. Hui admitted guilt in April to charges encompassing illegal public deposit absorption, fraud, and bribery following his arrest in China.

China Evergrande, initially established in 1996, defaulted on its debts in 2021, making it the world’s most indebted real estate developer. Authorities previously alleged Evergrande manipulated financial reports, overstating revenue by about $80 billion during 2019 and 2020. These tactics included prematurely logging revenue from sales before the completion and delivery of apartments.