Chinese property billionaire sentenced to life imprisonment for fraud
The founder of Chinese property giant Evergrande Group, Xu Jiayin (also known in Cantonese as Hui Ka Yan), has been sentenced to life imprisonment after being found guilty of large-scale fraud.
Evergrande was the world’s most indebted property developer, with more than 300 billion US dollars (approximately 5.32 quadrillion rupiah) in liabilities before being ordered into liquidation. The liquidation came as the Chinese government cracked down on excessive borrowing by Chinese property companies in 2020, plunging the country’s property market into crisis.
The verdict was handed down by the Shenzhen Intermediate People’s Court in Guangdong Province on Thursday (20/8).
The court also imposed a fine of 8.82 billion RMB (approximately 23.25 trillion rupiah) on Evergrande Group and a fine of 7 billion RMB (approximately 18.46 trillion rupiah) on Evergrande Real Estate.
“Defendant Xu Jiayin has been sentenced for a number of criminal offences to life imprisonment, deprivation of political rights for life, and confiscation of all his personal assets,” Chinese state media reported.
The court also ordered that his unlawfully obtained wealth continue to be pursued and confiscated. If the amount recovered remains insufficient, the relevant parties are ordered to pay compensation.
The court found that Xu Jiayin was the de facto controller of Evergrande Group, responsible for the group’s operational activities and managing and controlling a number of companies, including Evergrande Real Estate, Evergrande Wealth, Evergrande Nanchang, and other companies, with investments spanning the property, property management, finance, and other sectors.
Between 2016 and 2021, Evergrande Group, Evergrande Real Estate, and Xu Jiayin were found to have used various methods, including continuously falsifying financial reports on a large scale, inflating asset values, and concealing debt obligations.
They each committed a number of criminal offences, including illegally raising public funds, fraud in fund-raising, fraudulently issuing bonds, and unlawfully disclosing important information.
Evergrande Group and Xu Jiayin also obtained control of financial institutions through means such as bribery, then illegally withdrew and used credit funds and insurance funds for the benefit of Evergrande Group.
These actions included the criminal offences of bribery by a corporate entity, illegal lending, and unlawful use of funds.
Xu Jiayin also used his position as Chairman of Evergrande Real Estate to organise the falsification of financial reports and to take control of company assets under the pretext of dividend distribution.
The court also stated that the criminal acts committed by Evergrande Group, Evergrande Real Estate, and Xu Jiayin had seriously damaged the market order of the property economy, violated public and private property rights, and undermined integrity in the performance of state officials’ duties.
On the same day, the Shenzhen Intermediate People’s Court and the Nanshan District People’s Court in Shenzhen also handed down verdicts against a number of individuals involved in cases related to Evergrande Group, including illegally collecting public deposits, fund-raising fraud, and unlawful use of funds.
A total of 56 people, including Zhen Litao, Ke Peng, Xu Tenghe, Xu Zhijian, Du Liang, and Liang Dong, were sentenced to prison terms ranging from 18 years to one year and 10 months. They were also sentenced to fines or confiscation of assets.
Evergrande Group was once China’s largest property developer but has been burdened with debt since 2020.
The business group was founded in 1996 and has various industries including Evergrande Real Estate, Evergrande New Energy Auto, Evergrande Property Services, and Ocean Flower Island.
Evergrande Real Estate Group has more than 1,300 projects in over 280 cities in China, while Evergrande Property Services Group is a giant management company with around 3,000 projects and a total management area of more than 509 million square metres and a total contract area of more than 812 million square metres.
Meanwhile, Ocean Flower Island is an integrated tourism resort combining dining, accommodation, transport, tourism, shopping, entertainment, conferences, health, and culture in Danzhou City, Hainan Province, with a total area of 7.8 square kilometres.