China sentences Evergrande’s Hui to life for ‘heinous’ crime

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomeReal EstateChina sentences Evergrande’s Hui to life for ‘heinous’ crimeThe sentence doesn’t bring an end to the numerous legal fights surrounding EvergrandeAuthor of the article:Hui Ka Yan's charges follow a long list of harsh actions by Chinese authorities against corporate magnates. Photo by Justin Chin/Bloomberg via Getty ImagesChina Evergrande Group’s founder Hui Ka Yan has been sentenced to life in prison, bringing an end to one of the most dramatic rise and fall stories in China’s corporate history.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountThe disgraced property tycoon, once Asia’s second richest man, had turned Evergrande into a poster child of corporate excess during China’s long real estate boom. But after his empire came crashing down following a 2021 default, he was caught in a dragnet of official investigations that ultimately caused his downfall.Hui, who appeared visibly aged in court with greying hair, was sentenced alongside 56 others involved in Evergrande, including his sons Xu Zhijian and Xu Tenghe. His assets will be confiscated, and his companies were fined a combined 15.82 billion yuan (US$2.4 billion).SUBSCRIBER EXCLUSIVE: FP West: Energy Insider brings you behind the oilpatch’s closed doors with exclusive insights from insiders every Wednesday morning.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of FP West: Energy Insider will soon be in your inbox.We encountered an issue signing you up. Please try againThe move draws a curtain on what for years was one of China’s great success stories. Hui had binged on debt during Evergrande’s expansion, turning it into the world’s most indebted developer as he transformed the property giant into a sprawling conglomerate.But Chinese authorities concluded that his rise was built on deception. They said Hui had perpetrated a massive financial fraud that included inflating assets and concealing liabilities.In April, Hui had pleaded guilty in a Chinese court to charges including illegally taking public deposits and fundraising fraud.“The amount involved in the crime is exceptionally large, the circumstances are particularly heinous, exceptionally heavy economic losses have been caused, and the harm to society is extremely grave,” a report from state media outlet Xinhua wrote, adding that Evergrande and Hui “must be severely punished in accordance with the law.”Evergrande and Hui were also found guilty of fraudulently issuing securities, violating information disclosure rules as well as bribery. Meanwhile, the founder was accused of embezzling company assets through dividend mechanisms.The sentence doesn’t bring an end to the numerous legal fights surrounding Evergrande. The company is now in liquidation, with an army of creditors inside and outside of China poring over its assets in the hopes of recovering some of their heavy losses.Rags to RichesHui, also known as Xu Jiayin in Mandarin, was born in Henan province in 1958 and grew up in poverty. Encouraged by the prospect of Deng Xiaoping’s economic reform plan, the son of a wood cutter quit his job at a steel firm in 1992 and later began developing property in Guangzhou, the provincial capital of Guangdong. He then founded Evergrande in 1996 and rode the wave of China’s unprecedented real estate boom.Evergrande, which means “permanence and greatness” in Chinese, relied on heavy borrowing to fuel its growth, becoming the largest dollar-debt borrower among its peers and for a time the country’s biggest developer by sales. During its prime, the firm built more than 1,300 projects across 280 cities. Supercharged by real estate riches, it also expanded its reach into industries ranging from bottled water to professional soccer and electric vehicles.This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.For a long time, Evergrande skirted liquidity scares by tapping tycoons in China and Hong Kong to buy the firm’s stock and bonds. Hui also turned to his own suppliers and retail investors for financial backing. But Beijing’s crackdown on the property sector since 2020 capped its borrowing capacity, effectively cutting Hui off from credit markets.Hui’s charges follow a long list of harsh actions by Chinese authorities against corporate magnates.Anbang Group Holdings Co.’s former Chairman, Wu Xiaohui, was sentenced to 18 years in prison for fraud and embezzlement in 2018. That same year, China Huarong Asset Management Co. Chairman Lai Xiaomin was arrested amid a corruption scandal before being executed in 2021 on charges including bribery. HNA Group Co. Chairman Chen Feng was detained a few months later along with chief executive Tan Xiangdong for unspecified crimes.Evergrande defaulted on its debt in late 2021. Following failed restructuring attempts, it was given a winding up order in Hong Kong in 2024, marking a significant escalation in the unravelling of the sector. Later that year, a mainland Chinese court accepted a liquidation application filed against one of its major onshore units.Hui was taken away by Chinese police in 2023 and held under so-called residential surveillance — a type of police action that falls short of formal detention or arrest. Apart from a company filing confirming Hui being put under control, Chinese authorities had remained tight-lipped about his status since then.In 2024, Chinese regulators accused Evergrande’s main onshore unit of inflating more than 560 billion yuan of revenue by recognizing sales in advance, an alleged fraud that dwarfs that of Luckin Coffee Inc. and Enron Corp. China then suspended the operations of PricewaterhouseCoopers LLP, Evergrande’s long-time auditor, for six months and imposed fines.Much of Hui’s known wealth was derived from his controlling stake in Evergrande and the cash dividends he’s received from the company since its 2009 listing in Hong Kong. Hui had pocketed more than US$7 billion over the past decade, thanks to the firm’s generous payouts, according to Bloomberg calculations.—With assistance from Venus Feng, Pearl Liu and Trista Xinyi Luo.We apologize, but this video has failed to load.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.