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China Evergrande Group founder Hui Ka Yan has been sentenced to life in prison by a court in Shenzhen after pleading guilty to eight charges including misuse of funds, fundraising fraud, illegally taking public deposits, securities-related fraud and bribery. The court also ordered the confiscation of his personal property. Evergrande was fined 8.82 billion yuan, equivalent to about USD 1.31 billion, while its main subsidiary Hengda was fined 7 billion yuan. The ruling comes after the developer defaulted on most of its liabilities of around USD 300 billion, triggering a prolonged crisis in China's property sector.
China Evergrande Group founder Hui Ka Yan has been sentenced to life in prison, nearly three years after Chinese authorities detained him following the property developer's default.
A court in Shenzhen handed down the sentence after Hui pleaded guilty in April to eight charges. These included misuse of funds, fundraising fraud, illegally taking public deposits, illegally extending loans, fraudulently issuing securities and bribery.
The court also ordered the confiscation of all of Hui's personal property. It said the criminal activities involving Evergrande, its main subsidiary Hengda Real Estate and Hui involved very large amounts, caused major economic losses and created serious social harm.
Evergrande was fined 8.82 billion yuan, or around USD 1.31 billion, while Hengda Real Estate was fined 7 billion yuan. Five other senior executives received prison sentences and fines ranging from six to 18 years. State media CCTV reported that 56 people linked to Evergrande, excluding Hui, were sentenced in connection with the case.
The ruling is unlikely to provide much relief to Evergrande's creditors and homeowners. The company's liquidators declined to comment, while Reuters was unable to reach Hui's legal representatives. Hui, 67, had not been seen publicly since his detention in 2023.
Evergrande homeowners expressed anger over the company's collapse on social media, with some questioning the recovery of their money. The company's failure to repay billions of dollars in wealth-management products had earlier triggered protests by investors, many of whom were ordinary and lower-income households.
Hui founded Evergrande in 1996 after growing up in a rural village in central China's Henan province. A former steel technician, he built the company into China's largest property developer by contracted sales by relying heavily on debt to fund rapid expansion.
His wealth peaked at USD 45.3 billion in 2017, when Forbes ranked him as Asia's richest person.
Evergrande's financial problems became a major part of China's wider property crisis after the company defaulted on its debt. The developer had accumulated around USD 300 billion in liabilities, making it the world's most-indebted property developer.
A Hong Kong court ordered Evergrande's liquidation in 2024 after the company failed to present a workable debt restructuring plan. The Hong Kong Stock Exchange delisted the company's shares last year.
The liquidation process has remained slow. According to the liquidators, only around USD 255 million of assets had been sold as of last August, against creditor claims of about USD 45 billion.
Outside mainland China, liquidators have also been pursuing legal action to freeze offshore assets belonging to Hui and his former spouse. They are seeking to recover around USD 6 billion in dividends and remuneration paid to Hui and other former executives.
China's securities regulator had separately fined Hui USD 6.6 million in 2024 and imposed a lifetime ban from the securities market. The regulator found that Evergrande's flagship unit had inflated earnings and committed securities fraud.
The criminal case against Hui therefore comes after years of regulatory and legal action surrounding Evergrande's collapse. The company remains under liquidation, while creditors continue efforts to recover assets from one of China's biggest corporate failures.
Source Reuters
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