The founder of China Evergrande Group, the world’s most indebted property developer, has been sentenced to life in prison. A court in China handed down the ruling on Thursday. The verdict comes five years after the company’s collapse shook China’s economy and financial markets.
Hui Ka Yan was once Asia’s richest person. In April, he pleaded guilty to eight charges, including misuse of funds, fundraising fraud, illegally taking deposits from the public, illegal lending, issuing securities through fraudulent means, and bribery.
Evergrande, once China’s leading property developer, has defaulted on the majority of roughly $300 billion in liabilities. Its crisis has long stood as a symbol of the property-sector downturn dragging down the world’s second-largest economy.
‘What will happen to our money’
The ruling, handed down by a court in the southern Chinese city of Shenzhen, ordered the confiscation of all of Hui Ka Yan’s personal assets. It marks the end of his rags-to-riches story. However, it is unlikely to reassure Evergrande’s creditors at home and abroad.
Evergrande’s liquidators declined to comment on the ruling. Reuters was unable to reach Yan’s legal representatives. Chinese authorities detained him after Evergrande defaulted in 2023. He has not been seen in public since.
Photos released by the court show the 67-year-old, gray-haired Yan, wearing a long-sleeved navy-blue collared shirt, standing between two officials as the court reads out the verdict.
In a statement, the court said: “The criminal activities of Evergrande Group, Hengda Real Estate, and Hui Ka Yan involved enormous sums of money and extremely serious irregularities. This has caused severe economic and social harm, which is strictly punishable under the law.”
Homebuyers from Evergrande properties made various comments in a social media group. One wrote: “Every ordinary citizen has had to pay the price.” Another commented: “The prison sentence is basically there to protect him. If he came out, his life would be at risk.” Another wrote: “What will happen to our money?”
Alongside Yan’s sentence, the court said it had fined Evergrande 8.82 billion yuan ($1.31 billion) and its main affiliate, Hengda, 7 billion yuan. The court also ordered fines and prison sentences ranging from six to 18 years for five other senior executives of the company.
State media outlet CCTV reported that, besides Yan, a total of 56 individuals connected to Evergrande were sentenced to prison on Thursday.
Protests erupted after the company failed to repay hundreds of billions of dollars owed on wealth-management products. This threatened social stability, as many low-income ordinary investors lost their savings and were left destitute.
Evergrande’s liquidation process has dragged on for years
Yan, a former steel technician who grew up with his grandmother in a village in central Henan province, founded Evergrande in 1996. Through aggressive debt-fueled sales, he built it into China’s largest property developer.
According to Forbes, Yan’s net worth stood at $45.3 billion in 2017, the highest in Asia at the time.
A Hong Kong court ordered Evergrande’s liquidation in 2024, and the Hong Kong Stock Exchange delisted the company last year, accelerating the company’s collapse.
According to the liquidators, the liquidation process is moving extremely slowly. As of August last year, only $255 million worth of assets had been sold against creditors’ claims totaling $45 billion.
Outside mainland China, liquidators are fighting in court to seize offshore assets belonging to Yan and his former wife, in an effort to recover $6 billion in dividends and salaries paid to the founder and other former executives.
In 2024, China’s securities regulator fined Yan $6.6 million and banned him from the securities market for life, after an investigation found that Evergrande’s main unit had inflated its revenue and committed securities fraud.
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