Founder of China’s Evergrande pleads guilty to fraud
Founder of China’s Evergrande pleads guilty to fraud
Guilty Plea and Court Verdict
Hui Ka Yan, the founder of China’s struggling property giant Evergrande, admitted guilt on several counts, such as asset misappropriation and corporate corruption, as revealed by a court statement. During the public hearing in Shenzhen on 13 and 14 April, Hui conveyed regret, according to Chinese state media. The court will disclose its decision on the case at a later date. This admission signals a turning point in the aftermath of Evergrande’s financial collapse, which disrupted China’s real estate market and caused significant losses for investors and domestic banks.
Background of Hui Ka Yan
Hui, also known as Xu Jiayin, began his career in rural China, raised by his grandmother, before entering the property development sector and establishing Evergrande in 1996. His company initially thrived during China’s economic expansion, fueled by extensive borrowing. At its peak, Evergrande held a stock market valuation surpassing $50bn (£37bn), but its fortunes reversed in 2021, leading to a debt crisis that dismantled its operations.
Evergrande’s Collapse and Impact
The court detailed how the company siphoned millions in pre-sale funds from buyers, using the money for new ventures rather than construction. This practice left hundreds of properties unfinished across China. Evergrande’s decline is often linked to China’s ongoing property market slump, which deepened in 2021. At its peak, the firm operated around 1,300 projects in 280 cities, yet its debt soared to $300bn, making it the most indebted real estate developer globally.
In March 2024, Hui faced penalties, including a $6.5m fine and a lifetime ban from China’s capital markets, after his company inflated revenues by $78bn. Once Asia’s wealthiest individual with a fortune estimated at $42.5bn in 2017, Hui expanded Evergrande beyond property into electric vehicles and food production. The firm also acquired Guangzhou FC, which rose to prominence as China’s leading football team. By August 2025, Evergrande’s stock value had plummeted by 99%, resulting in its removal from the Hong Kong exchange after over a decade of trading.
