Evergrande founder Hui Ka Yan has been sentenced to life in prison by a court in Shenzhen, China, nearly five years after the property giant’s collapse sent shockwaves through the country’s property sector and financial markets.
The Shenzhen Intermediate People’s Court handed down the sentence on Thursday and ordered the confiscation of all of Hui’s personal property.
Hui, 67, who was once Asia’s richest man, pleaded guilty in April to eight charges, including misuse of funds, fundraising fraud, illegally taking public deposits, illegally extending loans, fraudulent issuance of securities and bribery.
The court found that Hui and Evergrande had committed serious financial offences involving huge sums of money, causing significant economic losses and serious social harm.
Evergrande was fined 8.82 billion yuan, about $1.31 billion, while its main mainland property subsidiary, Evergrande Real Estate Group, was fined an additional 7 billion yuan, bringing the combined fines to 15.82 billion yuan, or roughly $2.3 billion.
Five other senior Evergrande executives were sentenced to prison terms ranging from six to 18 years. In total, 56 people linked to the company were sentenced on Thursday, according to reports citing Chinese state broadcaster CCTV.
The court found that Evergrande had engaged in large-scale financial fraud, including inflating assets and concealing liabilities. Investigations showed that the company overstated revenue by about $80 billion in 2019 and 2020 by prematurely recognising property sales.
Evergrande had accumulated more than $300 billion in liabilities before defaulting on its debts in 2021, making it one of China’s largest corporate failures and a major symbol of the country’s prolonged property crisis.
The company’s collapse caused substantial losses for homeowners, investors and creditors, while problems involving wealth-management products triggered protests by investors who said they had lost their savings.
Evergrande was ordered into liquidation by a Hong Kong court in January 2024 after failing to present a viable restructuring plan. Its Hong Kong-listed shares were later delisted.
The liquidation process has been slow, with creditors facing major challenges in recovering their money. Reuters reported that only about $255 million had been recovered against claims of roughly $45 billion.
Hui founded Evergrande in the 1990s and transformed it into one of China’s largest property developers through an aggressive expansion strategy heavily dependent on borrowing. At the height of his wealth in 2017, he was worth an estimated $45.3 billion, according to Forbes.
His fortune collapsed as Evergrande’s financial problems deepened, bringing an end to the empire he had built during China’s property boom.
The life sentence follows a separate regulatory action in 2024, when China’s securities regulator fined Hui and imposed a lifetime ban from the securities market after finding that Evergrande had inflated its revenue and committed securities violations.
Hui’s sentence marks a dramatic fall for a businessman who once stood at the centre of China’s property boom, while creditors continue efforts to recover billions of dollars lost in Evergrande’s collapse.
Goodness Anunobi
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