Evergrande Founder Sentenced to Life in Prison in China

Ten years ago, Hui Ka Yan was the second richest man in Asia. On Thursday, a Chinese court sentenced him to life in prison for fraud and corruption. The founder of Evergrande, once the country's top real estate developer by sales, also had his personal assets confiscated and his political rights suspended for the rest of his life.

• Evergrande founder Hui Ka Yan has been sentenced to life in prison for fraud and corruption, with his assets confiscated and his political rights suspended for life.

• His companies were fined a total of 15.82 billion yuan, facing accusations of accounting fraud and asset misappropriation.

Hui was not judged alone. The court also sentenced 56 other individuals linked to Evergrande, including his two sons, Xu Zhijian and Xu Tenghe, according to Bloomberg. Evergrande, listed in Hong Kong, faces a fine of 8.82 billion yuan (approximately 1.3 billion dollars). Its mainland subsidiary, Hengda Real Estate, must pay an additional 7 billion yuan, bringing the total to 15.82 billion yuan, or about 2.4 billion dollars.

In April, Hui had already pleaded guilty to fundraising fraud and illegal collection of public deposits. The official news agency Xinhua justified the severity of the sentence bluntly, in remarks relayed by CNN: "the amount involved in this crime is exceptionally high, the circumstances are particularly heinous, the economic losses are exceptionally heavy, and the harm to society is extremely serious."

The group and its founder were also found guilty of fraudulent issuance of securities, violating financial information publication rules, and corruption. Hui allegedly misappropriated company assets through dividend mechanisms. In 2024, Chinese regulators had already accused Evergrande's main mainland subsidiary of inflating its revenues by over 560 billion yuan by accounting for sales in advance, a fraud compared to those of Luckin Coffee and Enron in its scale.

None of this came out of nowhere. Born in 1958 in Henan, the son of a lumberjack, Hui left his job in the steel industry in 1992 before founding Evergrande in 1996 in Guangzhou. The company built over 1,300 projects in 280 cities, heavily indebting itself to finance its growth until it became the most indebted developer in the world. It also diversified into bottled water, professional football, and electric vehicles, driven by the intoxication of the Chinese real estate bubble.

Beijing's tightening grip on the real estate sector starting in 2020 cut Hui off from his usual sources of financing. Evergrande defaulted at the end of 2021. Hong Kong declared its bankruptcy in 2024, before a mainland court also accepted a liquidation request targeting one of its main subsidiaries. Hui himself had been placed under house arrest as early as 2023, a regime intermediate between freedom and formal arrest.

The case is part of a long series of sanctions against fallen Chinese tycoons. Wu Xiaohui, former president of Anbang, was sentenced to 18 years in prison in 2018. Lai Xiaomin of China Huarong was executed in 2021 for corruption. Evergrande remains today in liquidation, with Chinese and foreign creditors fighting over what remains of its assets, a scenario feared by other over-indebted giants in the sector.

This content is provided for general informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online promotions, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets. Crypto assets are highly volatile and may result in loss. The availability of WEEX services, products, and related events may vary by region. You are responsible for ensuring that your participation is in accordance with applicable local laws and regulations.