HONG KONG (AP) — Chinese real estate developer Hui Ka Yan, founder of real estate group Evergrande, was sentenced to life in prison and the companies were fined a total of more than $2 billion, a court in the southern city of Shenzhen said Thursday. The decision marks a milestone in Evergrande’s saga after it collapsed with more than $300 billion in liabilities when Chinese authorities cracked down on excessive borrowing in the real estate industry in 2020. That triggered a crisis among many developers and caused a slowdown in the real estate market that has weighed on the broader economy since. The Shenzhen Intermediate People’s Court convicted Hui, 67, and Evergrande of engaging in large-scale financial fraud by inflating the group’s assets and hiding its liabilities. In a statement, the court also said Hui, also known as Xu Jiayin, abused his position by orchestrating fraud and misappropriating company assets. The Evergrande group was fined 8.82 billion yuan ($1.31 billion) and Evergrande Real Estate Group was fined 7 billion yuan ($1.04 billion), the court said in the statement. “The amount involved is exceptionally large, the circumstances are particularly egregious and extraordinarily large financial losses have been caused,” the court statement said. “The damage to society is extremely serious. Therefore, severe punishments must be imposed in accordance with the law.” Hui’s sons, Xu Tenghe and Xu Zhijian, were also sentenced along with senior Evergrande executives and others linked to the group on charges including illegal receipt of public deposits, fundraising fraud and illegal use of funds, China’s official Xinhua news agency said. A total of more than 50 people were sentenced to prison terms ranging from 22 months to 18 years, Xinhua said, although it did not provide a breakdown of sentencing details. A photograph of Hui’s courtroom appearance released by the Shenzhen court on Thursday showed an elderly Hui, who used to be a high-profile figure but had long been out of public view, dressed in a navy blue shirt between two uniformed officers behind a sign reading “accused.” Hui pleaded guilty in April to several charges, including illegal absorption of public deposits, fraud and bribery, after being detained in China. Subscribe to Morning Wire: Our flagship newsletter breaks down the day’s biggest headlines. China Evergrande, founded in 1996, defaulted on its debts in 2021. It was the world’s most indebted real estate developer before it was ordered to liquidate its assets. After Evergrande’s collapse triggered a broader crisis in China’s huge real estate sector, home prices have fallen by about 20% or more since 2021. Authorities in Hong Kong and mainland China previously said their investigations found that Evergrande had manipulated its financial data through tactics that included prematurely recording income from property sales before the completion and delivery of the apartments to buyers. Revenue was overstated by about $80 billion between 2019 and 2020, they said. Hui was fined 47 million yuan ($6.5 million) in 2024 and banned for life from China’s stock markets by the China Securities Regulatory Commission for inflating the company’s financial results, among other issues. Once reported to be the richest man in China, Hui used to own the Guangzhou Evergrande football club. At one point, he and his companies were involved in investing and building theme parks and electric vehicles. His story was one of rags to riches. Born in 1958 to a rural family in central China’s Henan province, he worked in the steel industry in the 1980s before founding Evergrande, which later prospered during China’s property market boom. He was one of many businessmen who also gained political clout by joining a major advisory organization, the Chinese People’s Political Consultative Congress.___Associated Press writer Huizhong Wu in Bangkok contributed to this report.
