On 13 and 14 April 2026, the People's Court of mediate Instance in Shenzhen, Guangdong Province, held its first proceeding on the case brought by the People's Prosecutor's Office in Shenzhen against the defendants:
- Evergrande Group Co., Ltd.
- Evergrande Real property Group Co., Ltd. and
- Xu Jia Yin, erstwhile group president.
This is not only a criminal matter, but besides a symbolic closure of an era in the Chinese real property sector. Xu Jia Yin, erstwhile 1 of China's richest men, stands trial present for crimes that led to the biggest bankruptcy shock in the past of the Chinese economy.
The prosecution covers 7 categories of economical crime:
- Illegal collection of public deposits – raising funds from citizens without the required licences;
- Fundraising fraud – misleading investors about the hazard and usage of capital;
- Illegal lending — lending activities outside the regulatory framework;
- Deception of securities – falsification of financial data in prospectuses;
- Misleading disclosure of applicable information – concealing losses and liabilities from the market;
- Bribery – corrupt practices with officials and partners;
- Mistrust of property and illegal usage of funds – in the case of Xu Jia Yina personally.
This is not a list of “irregularities”. This is simply a systemic description of the mechanisms that allowed Evergrande to grow over decades, ignoring risks and regulations.
The fact that Xu Jia Yin confessed and expressed remorse is of procedural and symbolic importance. From the position of Chinese law, admission of guilt can affect the milder dimension of the penalty. From a political perspective, it sends a signal that even the most powerful entrepreneurs are governed by the law.
At the same time, it is worth remembering that the Evergrande process is taking place in a circumstantial context: the Chinese government is actively "weighing" the real property sector, reducing the dependence of the economy on speculative housing boom. The judgement in this case may become a model for proceedings against another indebted developers.
The proceeding was attended by representatives of the People's Assembly of China's People's People's Political Consultative Conference, relatives of the defendants and representatives of investors whose funds were active in the Evergrande group's activities.
The process became an event with a social dimension. The participation of relatives of defendants and investors emphasizes the human dimension of the case: behind the figures are families who have lost their savings, workers who have lost their jobs, buyers of apartments who are waiting to complete their investment.
After further work on the collected material, the court shall inform the court of the date of transportation of the judgment.
China Evergrande Group was 1 of the largest housing developers in China, and at the same time an example of aggressive growth financed by debt. The company has been Founded in 1996 in Canton (Guangzhou). From a tiny local developer, it grew into a nationwide conglomerate with hundreds of real property projects and a wide diversification of activities.
The group besides lists projects specified as:
- Evergrande Mineral Water Group,
- Evergrande Grain & Oil Group,
- Evergrande Dairy Group,
- Hengda Hotels & Resorts,
- Evergrande Football Club,
- Evergrande Football School,
- Evergrande Cinemas and
- Evergrande Music.
At the end of the second decade of the 21st century, the conglomerate began to show problems regarding the anticipation of fulfilling both current obligations towards counterparties and the acquisition of a immense number of bonds. The checks carried out in the group companies showed structural irregularities. The company operated according to Ponzi's strategy alternatively than as a real company operating a reliable economical activity. The company's subsequent activities were financed from the money of subsequent, deceived investors and customers (the buyers of the apartments to be built in the future).
The yearly study for 2021 prepared by external auditors showed a net failure of RMB 686.22 billion for the group as a whole, of which RMB 476.04 billion for the shareholders of the parent company. The study for 2022 showed the net failure of RMB 125.81 billion, of which RMB 105.91 billion were held by shareholders of the parent company
In total, this resulted in around RMB 812.03 billion net failure for 2021–2022 at group level, or around RMB 581.95 billion failure attributed to shareholders of the parent company.
On the debt side, the scale of the problem was even greater. Already in 2021 Evergrande was incapable to handle around USD 305 billion of debt. According to the papers of 2024, the company owed around USD 300 billion, including around USD 20 billion of offshore debt, with assets of USD 240 billion.
Source:
• sz.people.com.cn
• news.cn
• caixin.com
Author: 梁安基 Andrzej Z. Liang, 上海 Shanghai, 中国 China
Email: [email protected]
Editorial: Leszek B.
Email: [email protected]
