China sentences Evergrande founder Xu Jiayin to life in prison for financial fraud

Life sentence and asset confiscation

The Shenzhen Intermediate People's Court sentenced Xu Jiayin, the founder of China Evergrande Group, to life imprisonment on Thursday following his conviction on multiple criminal charges. The ruling stripped Xu of his political and civil rights for life and mandated the total confiscation of his personal wealth. Xu, who is also known internationally as Hui Ka Yan, had once been the wealthiest person in China before the collapse of his real estate business. The indictment against him encompassed eight specific counts, including the misappropriation of company assets, fraudulent capital raising, embezzlement, and the illegal collection of public deposits. Xu had admitted guilt and expressed remorse during a court appearance in April, after which the tribunal postponed the final verdict. The court delivered the official announcement through the messaging service WeChat.

Corporate penalties and executive convictions

The court also levied multi-billion-yuan fines against the parent conglomerate and its principal real estate division. Evergrande Group received an official fine of 8.82 billion yuan ($1.311 billion), while its main operating branch, Evergrande Real Estate, received a separate fine of 7 billion yuan ($1.04 billion). Judicial authorities concurrently handed down prison sentences ranging between six and 18 years to five other top company figures. Among those convicted were Zhen Litao, the former president of Evergrande Real Estate, and Ke Peng, the former executive president of Evergrande Group. Chinese state broadcaster CCTV reported that the court passed 56 distinct sentences across the broader case, with the lightest punishment standing at one year and ten months of imprisonment.

Findings on financial fraud

Court findings established that Xu and Evergrande orchestrated sustained financial deceit over a span of five years. The court determined that the defendants acquired control over various financial institutions through bribery and diverted credit and insurance capital for company purposes. In its formal statement, the judiciary detailed the scope of the operations conducted by the corporate leadership.

Between 2016 and 2021, Evergrande Group, Evergrande Real Estate and Xu Jiayin violated national laws and, through continuous and large-scale financial falsification practices, artificially inflated assets and concealed liabilities, committing crimes of illegal acceptance of public deposits, fraudulent fundraising, fraudulent issuance of securities, and irregular disclosure of information.

The ruling also established that Xu abused his executive position at Evergrande Real Estate to organize corporate fraud and misappropriate company funds under the guise of dividend distributions.

Growth and collapse of the developer

Xu founded Evergrande in 1996, relying on aggressive debt accumulation during decades of rapid urban expansion to construct China's largest real estate developer by sales volume. The group was unable to meet its financial obligations and defaulted in 2021 as its total liabilities surpassed $300 billion. The company subsequently received a liquidation order, leaving unfinished projects that disrupted retail buyers and institutional creditors across China. Public security authorities took Xu into custody in late 2023, keeping him under detention without further public appearances. In 2024, Chinese securities regulators fined Xu 47 million yuan and barred him permanently from the securities industry for accounting fabrication.