Chinese court sentences Evergrande founder Hui Ka Yan to life in prison

A court in Shenzhen sentenced Hui Ka Yan, the founder of China Evergrande Group, to life in prison on Thursday, closing out the criminal phase of the collapse of what was once the world's most indebted property developer. Hui, 67, also known by his Mandarin name Xu Jiayin, was stripped of all political rights for life and had his personal assets ordered confiscated after pleading guilty in April to eight charges including fundraising fraud, illegally taking public deposits, fraudulently issuing securities and bribery.

The Shenzhen Intermediate People's Court also fined China Evergrande Group 8.82 billion yuan, roughly $1.31 billion, and its main onshore unit, Hengda Real Estate, a further 7 billion yuan. In a written judgment, the court said "the amount involved is exceptionally large, the circumstances are particularly egregious, and extraordinarily heavy economic losses have been caused. The harm to society is extremely serious. Therefore, severe punishment should be given in accordance with the law."

The numbers behind the ruling

The court found that between 2016 and 2021, Evergrande, Hengda Real Estate and Hui himself carried out sustained, large-scale financial fraud, inflating the group's assets and concealing its liabilities to keep credit flowing even as the company's finances deteriorated. More than fifty people were sentenced alongside Hui, with terms ranging from twenty-two months to eighteen years; they include his two sons, Xu Tenghe and Xu Zhijian, and several former senior Evergrande executives. The National Bureau of Statistics figures on the broader property sector give a sense of scale: real estate development investment nationally has fallen for four consecutive years, evidence of how deeply the industry Evergrande once symbolized has contracted since its 2021 default.

That 2021 default remains one of the largest corporate collapses in history. Evergrande listed liabilities of more than $300 billion, and its implosion triggered a wave of defaults across the Chinese property sector, wiping out the savings of homebuyers who had paid in advance for apartments that were never finished and unsettling a market that for two decades had been a primary engine of Chinese household wealth. The company was ordered into liquidation by a Hong Kong court in January 2024 and delisted from the Hong Kong Stock Exchange shortly afterward.

How Evergrande got here

Hui built Evergrande from a single Guangzhou housing project in the mid-1990s into China's second-largest property developer by sales, expanding aggressively into electric vehicles, a football club and a bottled-water brand along the way and briefly becoming Asia's second-richest man. China's securities regulator, the China Securities Regulatory Commission, found in a 2024 penalty decision that Hengda Real Estate had inflated its revenue by 213.99 billion yuan in 2019 and by 350 billion yuan in 2020 — more than three-quarters of the unit's reported sales that year — to keep issuing bonds and meet the terms of its lending agreements. That finding, which came with a lifetime market ban and a personal fine for Hui, laid the regulatory groundwork for the criminal case decided this week.

The collapse also exposed the excesses of what Chinese regulators later called the property sector's "three highs" model: high leverage, high turnover and high debt, under which developers pre-sold apartments years before completion and used the proceeds to fund new land purchases rather than finishing existing projects. Evergrande's default in 2021 was the clearest signal that model had run its course, as NPR noted in its coverage of Thursday's verdict.

• Life imprisonment for Hui Ka Yan, plus lifetime loss of political rights and asset confiscation
• 8.82 billion yuan ($1.31bn) fine for China Evergrande Group; 7 billion yuan for Hengda Real Estate
• More than 50 people sentenced, with terms from 22 months to 18 years
• Liabilities exceeded $300 billion when Evergrande defaulted in 2021

Who is affected

The most direct victims are the hundreds of thousands of Chinese homebuyers who paid deposits on Evergrande apartments that stalled or were never built, many of whom have waited years for delivery or refunds that courts have so far been unable to guarantee. Evergrande's offshore bondholders, who lost the bulk of their investment when the company was ordered liquidated, are separately pursuing claims through Hong Kong courts, a process that continues largely independently of the criminal case in Shenzhen. More broadly, the ruling lands at a moment when Beijing is still working to stabilize a property sector that for years accounted for close to a quarter of China's economic output; the International Monetary Fund has continued to flag a deeper-than-expected property contraction as the principal risk to China's growth outlook this year.

A muted market reaction

Analysts said the sentencing itself was unlikely to move markets, since Evergrande's fate has effectively been priced in since its 2021 default and subsequent liquidation. S&P Global Ratings director Edward Chan said the case was more a symbolic closing chapter than a fresh shock: the 2021 default, he noted, had already "signalled the end of the 'three highs' business model," and he did not expect the sentencing to have much further market impact. Coverage of the ruling by outlets including the South China Morning Post and CNN emphasized that the case has come to stand less for one man's downfall than for the reckoning still working its way through China's broader real estate industry, where several other major developers remain in various stages of restructuring or default.

What happens next

Under Chinese criminal procedure, Hui and his co-defendants retain a right of appeal, though defendants who plead guilty rarely succeed in overturning a sentence on appeal, and none of the parties has signalled an intention to contest Thursday's ruling. The court said it would continue pursuing recovery of illegal gains from Hui and the corporate defendants, with any shortfall to be made up through further restitution orders, though creditors and homebuyers are not expecting to recover more than a fraction of what they are owed. Evergrande itself remains in liquidation, its shares canceled and its remaining assets being sold off under the supervision of Hong Kong-appointed liquidators, a process expected to continue for years. For China's property sector as a whole, regulators have signalled that Hui's sentencing is meant to serve as a deterrent to other developers, even as the broader industry continues to work through a debt overhang that has yet to fully clear.