Hui Ka Yan, founder of China Evergrande Group, was sentenced to life in prison by a Chinese court on Thursday, five years after the property developer’s collapse sent shockwaves through China’s economy and financial markets.
The 67-year-old former property tycoon pleaded guilty in April to eight charges, including misuse of funds, fundraising fraud, illegally taking public deposits, illegally extending loans, fraudulently issuing securities and bribery. The court also ordered the confiscation of his personal property.
Evergrande, once China’s largest property developer by contracted sales, has defaulted on most of its roughly $300 billion in liabilities.
Its collapse has come to symbolise a prolonged crisis in China’s property sector, which has weighed heavily on the world’s second-largest economy.
The sentence was handed down in the southern Chinese city of Shenzhen and is unlikely to provide much relief to Evergrande’s domestic and foreign creditors, who continue to face uncertainty over the recovery of their funds.
Evergrande’s liquidators declined to comment on the sentence. Reuters was unable to reach legal representatives for Hui, who had not been seen in public since Chinese authorities detained him in 2023 following the company’s default.
In pictures released by the court, Hui stood between two officers wearing a long-sleeved navy-blue collared shirt as the court read out his sentence.
“The criminal acts of Evergrande Group, Hengda Real Estate, and Hui Ka Yan involved particularly huge amounts and egregious circumstances, caused particularly significant economic losses and caused particularly serious social harm, and should be severely punished according to law,” the court said in a statement.
Comments from Evergrande homeowners in a social media group reflected anger over the losses suffered by ordinary investors. Some wrote, “All ordinary citizens have paid the cost,” while another asked, “What about our money?”
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The court also fined Evergrande 8.82 billion yuan and its main subsidiary, Hengda Real Estate, 7 billion yuan. Five other senior executives received prison sentences ranging from six to 18 years, along with fines.
In total, 56 people linked to Evergrande were sentenced on Thursday, state broadcaster CCTV reported. The company’s failure to repay billions of dollars in wealth-management products triggered protests and raised concerns about social stability after ordinary investors, many of them on lower incomes, lost their investments.
Hui, a former steel technician who was raised by his grandmother in a rural village in central China’s Henan province, founded Evergrande in 1996 and transformed it into the country’s biggest property developer by aggressively taking on debt.
At the height of his wealth in 2017, Hui was worth $45.3 billion, making him Asia’s richest person at the time, according to Forbes.
But Evergrande’s rapid expansion unravelled as China tightened restrictions on developers’ borrowing. The company eventually defaulted on its debt, leaving homeowners, investors and creditors facing billions of dollars in losses.
A Hong Kong court ordered Evergrande to be liquidated in 2024, while the Hong Kong Stock Exchange delisted the company last year, ending a tumultuous boom-to-bust chapter for investors.
The liquidation process has moved slowly. According to the company’s liquidators, only about $255 million worth of assets had been sold as of August last year, compared with creditors’ claims totalling about $45 billion.
Outside mainland China, liquidators are also pursuing legal action to freeze the offshore assets of Hui and his former spouse as they seek to recover about $6 billion in dividends and remuneration paid to the founder and other former executives.
In 2024, China’s securities regulator fined Hui $6.6 million and permanently barred him from the securities market after finding that Evergrande’s flagship unit had inflated its earnings and committed securities fraud.
REUTERS
