Founder of China’s Evergrande pleads guilty to fraud

Founder of China’s Evergrande pleads guilty to fraud

Hui Ka Yan, founder of the struggling Chinese real estate giant Evergrande, admitted guilt on multiple charges, such as asset embezzlement and corporate bribery, as per a court statement. During a public hearing in Shenzhen on April 13 and 14, Hui conveyed regret, according to Chinese state media.

The court has yet to release its judgment on the case, but Hui’s acknowledgment of wrongdoing signals a critical development in the ongoing crisis.

This admission represents a significant turning point in the aftermath of Evergrande’s collapse, which destabilized the Chinese property market and left investors and banks in turmoil. Before its downfall, the company was China’s leading real estate firm, boasting a stock valuation exceeding $50 billion, before descending into a debt crisis in 2021 that disrupted its operations.

During the trial, the court revealed that Evergrande collected millions in pre-sale funds from buyers but used them for new ventures rather than construction, leading to numerous uncompleted properties nationwide. The firm also became known for its staggering $300 billion in borrowed money, which underpinned much of its expansion.

Hui Ka Yan, who is also recognized as Xu Jiayin, originated from modest rural roots in China, where he was raised by his grandmother before entering the property development industry and establishing Evergrande in 1996. His business grew rapidly, fueled by China’s economic boom and heavy borrowing, expanding into sectors like electric vehicles and food production. Evergrande even acquired a majority stake in Guangzhou FC,