A court in China on Thursday sentenced the billionaire founder of Evergrande to life in prison, years after the real estate giant’s collapse brought China’s financial system to the brink.
Hui Ka Yan, the company’s founder and former chairman, pleaded guilty in April to several charges, including fund-raising fraud, misuse of funds and securities fraud.
The Shenzhen Intermediate People’s Court found that between 2016 and 2021, Mr. Hui and Evergrande engaged in large-scale financial fraud and committed crimes including misuse of funds, fund-raising fraud and illegally taking public deposits, according to an announcement the court posted on social media.
The court ordered Mr. Hui’s assets seized and fined Evergrande Group and its subsidiary, Evergrande Real Estate Group, a combined $2.35 billion. His appearance in court, dressed in a navy blue shirt with a flash of white hair, was the first time Mr. Hui had been seen since he disappeared from public view in 2023.
Evergrande was once China’s fastest-growing property developer, but its collapse in 2021 under more than $300 billion of debt pushed China’s financial system to the edge and exposed the vulnerabilities of the country’s economy — especially its dependency on real estate as a driver of growth.
No other company played as big a role in China’s staggering real estate boom, and its crash marked the beginning of a prolonged crisis that is still being felt across the economy.
The court found that Mr. Hui bore responsibility for Evergrande Group’s operations and should be punished severely because his actions and those of the company “seriously disrupted the socialist market economic order,” according to its social media post.
“The amount involved in the crime is exceptionally large, the circumstances are particularly heinous, exceptionally heavy economic losses have been caused, and the harm to society is extremely grave,” the court said.
Mr. Hui founded Evergrande in 1996 in the southern city of Guangzhou, just as China was beginning to urbanize and move people from the countryside into the cities. The company’s success turned Mr. Hui into one of the world’s richest people and he expanded his empire to include a soccer team and an electric vehicle company.
But by 2020, Beijing was growing worried that its property boom — the biggest the world has ever seen — was threatening the financial system because property developers like Evergrande had borrowed so heavily from local governments and banks. To cool the market, officials began restricting how much developers could borrow, cutting debt-burdened companies like Evergrande off from the cash they needed to fund their operations.
When Evergrande collapsed in 2021, much of the blame was placed on Beijing. But the company had been borrowing beyond its means for years and had engaged in questionable accounting and poor oversight that led to a series of unusual events, including the disappearance of $2 billion.
The company was forced into liquidation by a Hong Kong court in 2024. The Shenzhen court on Thursday also sentenced 56 other people, including Mr. Hui’s two sons, to terms ranging from 22 months to 18 years.
Siyi Zhao contributed research.
