Hui Ka Yan, 67, founder of Chinese real estate developer Evergrande. [AFP]
Hui Ka Yan, 67, founder of Chinese real estate developer Evergrande. [AFP]

Hui Ka Yan, the 67-year-old founder of Chinese real estate developer Evergrande, has been sentenced to life in prison.

A Chinese court sentenced Hui to life imprisonment Thursday and ordered the confiscation of all his personal assets, according to CNN, The Guardian and other foreign media outlets.

Evergrande was fined 8.82 billion yuan ($1.31 billion), while Hengda Real Estate, its domestic arm, was fined an additional 7 billion yuan. The combined penalty of $2.3 billion is among the largest corporate fines ever imposed in a Chinese criminal case.

The court found that Evergrande had carried out large-scale financial fraud from 2016 to 2021, inflating assets and concealing liabilities.

"The amounts involved are extremely large, the circumstances are particularly egregious, and the economic losses caused are enormously heavy," the court said in its ruling. "The harm done to society is extremely serious, and the law demands severe punishment."

Hui pleaded guilty in April to eight charges, including misappropriation of funds, fundraising fraud, illegal deposit-taking from the public, illegal lending, fraudulent issuance of securities and bribery.

Hui's two sons, Xu Tenghe and Xu Zhijian, were also sentenced the same day. China's state news agency Xinhua reported that more than 50 Evergrande executives and associates received prison terms ranging from 22 months to 18 years on charges including illegal deposit-taking, fundraising fraud and illegal use of funds.

Evergrande's crisis began in 2020 when the Chinese government introduced regulations capping the debt levels of real estate companies. Real estate has traditionally accounted for between a quarter and a third of China's GDP.

Construction halted at hundreds of project sites as companies ran out of cash during the COVID-19 pandemic, when demand froze. A research paper published this year estimated the sunk costs from the regulatory crackdown at $347 billion across the broader Chinese economy.

Evergrande's debt exceeded $300 billion, making it the world's most indebted real estate developer. A Hong Kong court ordered its liquidation in January 2024, and the company was delisted from the Hong Kong stock exchange last year.

Investigations by Chinese and Hong Kong authorities also uncovered accounting manipulation — specifically, the practice of booking pre-sale revenue before apartments were completed and handed over to buyers. Inflated sales figures for 2019 and 2020 were estimated at around $80 billion.

Hui was born in a rural village in the late 1950s and entered university in 1978 after a second attempt at the entrance exam. He founded Evergrande in Guangzhou in 1996 and expanded into real estate, electric vehicles and professional soccer.

Forbes ranked Hui as China's wealthiest person in 2017, estimating his fortune at $42.5 billion.


dbsdn1110@heraldcorp.com