Ex-Evergrande Boss Hui Ka Yan gets Life in Prison

By: Toh Han Shih

Hui Ka Yan, the founder and former chairman of China Evergrande Group, once the largest Chinese property developer with a stockmarket valuation above $50 billion, was sentenced to life in prison on corruption charges on Aug. 20 by the Intermediate People’s Court of Shenzhen.

It is rare for a private businessman to be jailed for life in China, and the severity of Hui’s sentence is partly due to the fact that he controlled Chinese banks by bribing bankers. Hui topped the Forbes list of Asia’s wealthiest people in 2017.

Fifty-six others were sentenced the same day to prison terms ranging from one year and 10 months to 18 years in connection with the defunct company, which was delisted in 2025, according to Xinhua.

This is likely the largest number of people imprisoned for one commercial case in Chinese history and the guilty include Hui’s sons Peter Xu and Xu Zhijiang. All were fined or had their assets seized – it will be the job of the court to find the assets, some of which are still concealed.

The court also stripped Hui of his political rights and confiscated his assets. At the same time, Hong Kong courts are hearing cases by creditors seeking to recover assets from Evergrande.

Hui’s staggering fall from the heights of what had been China’s hottest property company at a time of staggering growth marks a milestone in Evergrande’s collapse, which “seriously disrupted” the Chinese property market, the court said.

Evergrande defaulted on $305 billion of debt in late 2021, the largest corporate default ever in China. The collapse triggered the cratering of China’s property market.

Hui rose from humble rural origins and at the peak of his power and fame he was routinely lauded for his rags to riches saga as a symbol of China’s economic success. He publicly backed the Communist Party.

The court found Hui, who is also known as Xu Jiayin, fully responsible for the operations and crimes of Evergrande, which was headquartered in Shenzhen. Evergrande was fined RMB8.82 billion S$1.3 billion) and its main subsidiary, Hengda Real Estate Group, was fined RMB7 billion.

“The amounts involved were extremely huge, the nature of the crimes was exceptionally serious, resulting in extremely large economic damage and exceptionally severe harm to society, [the defendants] should be severely punished,” Xinhua wrote.

“China Evergrande Group and Xu Jiayin [Hui] gained control of financial institutions through bribery. They illegally obtained loans and insurance funds for Evergrande’s use. They bribed banks to illegally issue loans,” said the Xinhua report.

Hui pleaded guilty in Shenzhen on April 14 to embezzling public funds, fraudulently raising funds, fraudulently issuing bonds and securities, illegally using funds, failure to disclose material information, abuse of position and bribery.

Hui once created a subsidiary to employ a cast of young Chinese women, the Evergrande Song and Dance Troupe, to entertain rich and powerful men and to corrupt Chinese officials, according to Asia Sentinel on April 15.

Hui “used his position as chairman of Evergrande to falsify financial reports to embezzle company assets in the name of dividends,” Xinhua wrote. The court said that from 2016 to 2021 the defendants inflated assets, concealed debt, illegally took funds from the public, fraudulently raised funds and fraudulently issued securities.

Evergrande overstated its revenues by hundreds of billions of RMB, due to its aggressive approach to recognising revenues, said a judgement in Hong Kong’s Court of Appeal on Jan. 2. This resulted in “a dramatic reversal” of $99 billion in revenues recorded by Evergrande for 2021, said the Hong Kong judgement.

Evergrande lied about its completed properties held for sale and properties under development, the judgement added. It inappropriately classified developments as investment properties and overstated their values, the judgement added.

The misstatements were made under the direction of Hui and Xia Haijun, a former vice chairman of Evergrande, said the Hong Kong judgement. Xia resigned from the company in 2022.

Hong Kong’s Accounting and Financial Reporting Council (AFRC) sanctioned US accounting giant PwC and two of its former partners, Cheung Siu Cheong and Chow Sai Keung, for misconduct in connection with audits of Evergrande’s financial statements, the regulator announced on April 23.

The watchdog fined PwC HK$300 million ($38 million), restricted its practice in Hong Kong for six months and fined the two former partners HK$10 million.

The Evergrande case raises broader issues for the US, including foreign creditor rights in corporate restructurings in China, risks in how Chinese firms are structured, operate, and report, and the extent to which China market risks are sufficiently disclosed, said a US Congressional Research Service (CRS) report on May 12.

“Congress might assess China’s property market and debt levels with an eye to US investment exposure to China,” the report suggested.

Toh Han Shih is a Singaporean writer in Hong Kong and a regular contributor to Asia Sentinel.