Founder Evergrande sentenced to life imprisonment

chiny24.com 1 month ago

Zdjęcie: Hui Ka Yan, założyciel i faktyczny kontrolujący China Evergrande Group, został skazany na dożywotnie pozbawienie wolności.

Hui Ka Yan, the founder and actual controlling China Evergrande Group, was sentenced to life imprisonment. The conviction announced on 20 August the People's Court of mediate Instance in Shenzhen, Guangdong Province. The court besides ruled for life the deprivation of political rights, the forfeiture of all individual assets of the convicted individual and the further recovery of funds deemed illegally obtained. This is the first instance.

The case was not only covered by Hui Ka Yan himself, but besides by China Evergrande Group and Evergrande Real property Group, the entity liable for the group's improvement activities.

Judgment of first instance and penalties for companies

The Shenzhen court fined China Evergrande Group at RMB 8,82 billion, and Evergrande Real property Group at RMB 7 billion. 56 persons associated with the group were convicted in the same proceedings; they received penalties from 1 year to 18 years in prison, as well as fines or forfeiture of property.

At the same time, the court ordered further prosecution of proceeds from the crime and, erstwhile their recovery is not sufficient, the return of the missing part. However, the judgement itself does not mean the automatic conclusion of settlements with creditors and landlords. Criminal proceedings, enforcement of claims and liquidation of a company are separate processes.

Actions assigned to and controlled by the group

According to the Xinhua Communication, the court found that between 2016 and 2021 Evergrande, its improvement company and Hui Ka Yan overstated assets and hid liabilities through long-term and extended financial counterfeiting. The actions identified in the ruling included illegal adoption of measures from the public, fraud in obtaining funding, fraudulent issuance of securities and breaches of information obligations.

The court besides found that the group and its controlling authorities gained control of financial institutions through bribes and subsequently unlawfully directed loans and insurance funds to Evergrande. Hui Ka Yan was besides found to be liable for the activities of utilizing the position of president of Evergrande Real property to organize accounting forgeries and get the company's assets in the form of dividends.

Reuters reported that in April 2026 Hui confessed to 8 charges, including the misuse of funds, fraud in funding, illegal collection of deposits, illegal lending, fraudulent issuance of securities and bribery.

From administrative sanctions to criminal proceedings

The criminal trial was preceded by an administrative procedure conducted by the Chinese Securities Supervision Commission. In May 2024, the regulator fined Evergrande Real property Group with RMB 4.175 billion for fraudulent issuance of bonds and breaches of information obligations. Hui Ka Yan then received a fine of RMB 47 million and a life ban on the securities market.

The Chinese Securities Supervision Commission stated that between 2019 and 2020 the company overstated gross and profits by early designation of revenues. The administrative sanction of 2024 and the fines of the court of 2026 do not apply to the same procedure and should so not be added up or presented as a single penalty.

For readers following the erstwhile steps of the procedure, a reminder of confession by Xu Jiayin. The present ruling closes the phase of the proceedings before the court of first instance, not all cases relating to the group’s assets and its creditors.

The liquidation does not end the creditor case

Evergrande became a symbol of the financial problems of any Chinese developers after a period of expansion financed by debt. According to Reuters, the group did not pay most of the liabilities estimated at US$300 billion. The Hong Kong court ordered her liquidation in 2024 and in 2025 the group shares were withdrawn from trading on the Hong Kong stock exchange.

The liquidation data quoted by Reuters show the scale of the challenge. By August 2025 assets worth USD 255 million were sold, while creditors' claims were USD 45 billion. This is data from a circumstantial minute of the process, not the current liquidation balance, but explains why recovery can take a long time.

The Evergrande case not only affected financiers. The company sold apartments before the investment was completed, so the insolvency besides translated into the situation of the purchasers of premises, suppliers and persons with property management products. The broader background of these phenomena describes our text about Real property in China.

The judgement against Hui Ka Yan indicates the scale of the criminal liability attributed in this case to the controlling group and its companies. However, for creditors and those waiting for settlement of housing projects, it is more crucial how rapidly and to what degree they will recover the assets that can be utilized to satisfy claims.

Their – creditors – the top hope is that the Evergrande case is simply a model: the authorities want to demonstrate, on the 1 hand, the mechanics of specified companies, on the another hand, to inform owners and managers of improvement companies that the sector will not end in Evergrande. Life sentences are of vital importance here. Hui Ka Yan will share all his cognition with prosecutors. For the remainder of his life, he will most likely be an example of a man who has forgotten that even the top money does not make anyone free from work for their actions in China.

A Chinese proverb about killing a chicken to scare a monkey takes on the sound of “prisoning a chicken to make the monkeys understand”.

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