Hui Ka Yan, the founder of China Evergrande Group, the world’s most indebted property developer, was sentenced to life in prison by a Chinese court on Thursday. The sentence comes five years after the firm’s collapse significantly impacted China’s economy and financial markets.
Hui, once Asia’s richest man, pleaded guilty in April to eight charges including misuse of funds, fundraising fraud, illegally taking public deposits, illegally extending loans, fraudulently issuing securities, and bribery. The court in Shenzhen also ordered the confiscation of all of Hui’s personal property.
Evergrande, which at its peak was China’s premier developer, has defaulted on more than $300 billion in liabilities. Its struggles have become emblematic of a broader crisis in the Chinese property sector that has weighed on the world's second-largest economy for an extended period.
In addition to Hui’s sentence, Evergrande was fined 8.82 billion yuan ($1.31 billion), and its main subsidiary, Hengda Real Estate, was fined 7 billion yuan. Five other senior executives received prison sentences ranging from six to 18 years, and 56 other individuals linked to Evergrande were also sentenced, according to state media CCTV.
The company’s inability to repay billions of dollars in wealth management products led to protests, raising concerns about social stability, particularly among ordinary investors who lost significant holdings.
Hui, 67, a former steel technician, founded Evergrande in 1996. The company aggressively took on debt to become China’s largest property developer by contracted sales. In 2017, Forbes reported Hui’s net worth at $45.3 billion, making him the wealthiest person in Asia that year.
A Hong Kong court ordered Evergrande liquidated in 2024, and the Hong Kong Stock Exchange delisted the company last year. The liquidation process has progressed slowly, with liquidators reporting the sale of approximately $255 million in assets as of August of the previous year, against creditor claims totaling $45 billion.
Outside of mainland China, liquidators are engaged in legal battles to freeze offshore assets belonging to Hui and his former spouse in an effort to recover $6 billion in dividends and remuneration paid to executives. In 2024, China’s securities regulator fined Hui $6.6 million and banned him from the securities market for life, citing findings that Evergrande’s flagship unit had inflated earnings and committed securities fraud.