China has sentenced Xu Jiayin, founder of the collapsed property giant Evergrande Group, to life imprisonment over financial crimes linked to the company’s years of aggressive expansion and eventual debt crisis.
The Shenzhen Intermediate People’s Court in Guangdong province also fined Evergrande Group and its real estate subsidiary 15.82 billion yuan, equivalent to about $2.4 billion.
Xu, also known as Hui Ka Yan in Cantonese, was convicted of several offences, including large-scale financial fraud.
The court said he would have his political rights revoked for life and all his personal assets confiscated.
According to the judgment, Xu and Evergrande engaged in large-scale financial fraud between 2016 and 2021, allegedly inflating the company’s assets while concealing its liabilities.
The court further accused the company and its founder of using bribery to obtain control of financial institutions, although it did not identify the institutions allegedly involved.
Xu had pleaded guilty in April to charges including embezzlement and bribery.
Five other senior Evergrande executives were also convicted and sentenced to between six and 18 years in prison for offences that included fraud, the court said.
Evergrande was once the most prominent symbol of China’s property boom, expanding rapidly as it borrowed heavily to finance housing developments and other businesses.
Its fortunes changed after Chinese authorities introduced measures designed to curb excessive borrowing and speculative activity in the property market.
As access to credit tightened, Evergrande struggled to raise fresh funds and meet its mounting debt obligations. The company eventually defaulted in 2021, leaving creditors facing billions of dollars in unpaid liabilities.
The developer’s collapse became a defining episode in China’s prolonged property-sector crisis, exposing the risks created by years of rapid borrowing and expansion.
The latest court ruling represents a significant legal consequence for Xu and other former senior executives as authorities continue to address financial misconduct associated with the property downturn.
The case also underscores Beijing’s tougher approach to corporate financial malpractice and the risks associated with excessive leverage in the country’s property sector.
Leave a Reply