Hui Ka Yan, the founder of collapsed Chinese property giant Evergrande, has been sentenced to life in prison after pleading guilty to fraud, embezzlement, and bribery, with a Shenzhen court ordering the confiscation of all his personal property.
The ruling by Shenzhen Intermediate People’s Court marks a defining moment in the fallout from Evergrande’s collapse, which shook China’s property sector and hit investors and domestic banks hard. Hui and his businesses “seriously disrupted” the Chinese property market, resulting in significant economic losses, the court said. Hui’s convictions relate to a debt crisis at Evergrande, which shook China at a time when the government had been trying to make the world’s second-largest economy less reliant on the real estate sector.
The verdict came on Thursday. Hui, 67, pleaded guilty in April to eight charges, including misuse of funds, fundraising fraud, illegally taking public deposits, illegally extending loans, fraudulently issuing securities, and bribery. The court said that between 2016 and 2021, Hui “violated state laws by employing methods such as sustained, large-scale financial fraud to inflate assets and conceal liabilities.”
Hui’s wealth and influence dwindled as his company unravelled. Once named by Forbes as China’s richest man, with a net worth of $42.5bn (£31.2bn) in 2017, he had been estimated to be Asia’s richest person at the height of his fortunes. The court said his actions had “severely disrupted the order of the socialist market economy” and “caused exceptionally heavy economic losses.”
A company built on debt
Born to a poor family in rural Henan province, Hui, also known as Xu Jiayin, was raised by his grandmother before setting up Evergrande in 1996. He oversaw the company’s rapid rise through an aggressive expansion programme funded with large amounts of borrowed money. Evergrande became China’s biggest real estate developer, with a stock market valuation of more than $50bn (£36.7bn). At its height, Evergrande was the biggest firm in the country’s real estate industry, which made up about a third of China’s gross domestic product at the time. In 2018, Hui thanked the Chinese Communist party for providing “everything that Evergrande and I have.”
The firm was dealt a huge blow in 2020. Beijing introduced measures to control debt in the country’s property sector, torpedoing a debt-fuelled real estate industry that had traditionally accounted for between one-quarter and one-third of China’s gross domestic product. As Evergrande struggled to meet interest payments on its debts, it sold properties at huge discounts to stay afloat. The company collapsed in 2021. It has since defaulted on most of its $300bn in liabilities.
The court heard in April that Evergrande had taken millions of dollars in pre-sale funding from potential home buyers that was not used for construction. The money was instead channelled to new property developments, resulting in hundreds of unfinished projects. Construction stalled across the sector as companies scrambled for cash and struggled to pay suppliers amid weak demand during the Covid-19 pandemic.
Wider fallout
More than 50 individuals linked to Evergrande were also sentenced, with prison terms ranging from 20 months to 18 years. Among them were Hui’s two sons, Xu Zhijian and Xu Tenghe, according to state media. The court fined Hui’s former companies a total of 15.82bn yuan (£1.73bn; $2.35bn) over multiple crimes, including falsifying records and concealing debt. Evergrande Group was fined 8.8bn yuan (£950m), while its property arm was fined 7bn yuan.
In March 2024, Hui was fined $6.5m and banned from China’s capital market for life after his company overstated its revenue by $78bn. Evergrande’s stock market valuation shrank by 99% before its shares were removed from the Hong Kong exchange in August 2025 after more than a decade and a half of trading.
The damage extends far beyond one company. Evergrande’s implosion has been blamed for triggering a broader slump in China’s property market that continues to weigh heavily on the broader economy. It has been seen as a symbol for the wider troubles in the property sector. A study published this year estimated that the regulatory crackdown led to about $347bn in sunk costs across the Chinese economy. Several other major developers have faced financial woes, and the property market, once a significant driver of growth and an important revenue source for local governments, now drags on growth.