Evergrande Founder Gets Life Sentence for Fraud

The founder of China Evergrande Group, Hui Ka Yan, once Asia's richest man, received a life sentence from a Chinese court on Thursday. Hui pleaded guilty to multiple charges, including misuse of funds and fraud, stemming from the property developer's collapse. His sentencing follows Evergrande's default on over $300 billion in liabilities, symbolizing a broader crisis in China's property sector that has significantly impacted the country's economy.

Evergrande's main subsidiary, Hengda Real Estate, was fined 7 billion yuan. In addition to Hui's sentence, five other senior executives received prison terms ranging from six to 18 years, and a total of 56 individuals connected to Evergrande faced sentencing. The company's failure to repay wealth-management products led to protests from investors who lost their savings.

The Hong Kong Stock Exchange delisted Evergrande last year, and a Hong Kong court ordered its liquidation in 2024. The liquidation process has been slow, with only a fraction of creditors' claims being recovered. Liquidators are pursuing offshore assets to recover billions in dividends and remuneration paid to Hui and other former executives.

Earlier this year, China's securities regulator had already fined Hui and barred him from the securities market for life due to inflated earnings and securities fraud. The court statement indicated that the criminal acts involved huge amounts, egregious circumstances, significant economic losses, and serious social harm, necessitating severe punishment.