Founder of China’s Evergrande pleads guilty to fraud
Founder of China’s Evergrande Pleads Guilty to Fraud
Hui Ka Yan, the founder of Evergrande, a prominent Chinese property developer, has admitted responsibility for multiple offenses, including misappropriating company funds and engaging in corporate bribery, as reported by the court’s official statement. His public confession took place during a hearing in Shenzhen on 13 and 14 April, according to Chinese state media. The court has yet to deliver its final judgment, with the verdict expected to be announced in the future.
The acknowledgment of guilt signals a significant turning point in the aftermath of Evergrande’s financial collapse, which disrupted the Chinese property market and caused substantial losses for investors and domestic banks. Once regarded as China’s largest real estate firm, the company’s stock valuation plummeted to under $50 billion by 2021, marking the start of a debt-induced crisis that destabilized its operations.
Background of the Founder
Hui, who also goes by Xu Jiayin, began his journey in rural China, raised by his grandmother before entering the property development industry. In 1996, he established Evergrande, which later expanded beyond real estate into sectors such as electric vehicles and food production. The firm also acquired a majority share in Guangzhou FC, becoming a leading football team in China.
Evergrande’s downfall has frequently been linked to the prolonged downturn in China’s property market, which accelerated in 2021. At its peak, the company operated 1,300 projects across 280 cities, yet its business model relied heavily on borrowed funds. By 2023, Evergrande had accumulated over $300 billion in debt, making it the most indebted real estate developer globally.
Financial Consequences
In March 2024, Hui was sentenced to a $6.5 million fine and indefinitely barred from China’s capital market for his role in inflating the company’s revenue by $78 billion. Once ranked as Asia’s wealthiest individual with an estimated fortune of $42.5 billion in 2017, his financial standing has since diminished dramatically.
Evergrande’s stock market value dropped by 99% before it was delisted from the Hong Kong exchange in August 2025, following more than 15 years of trading. The firm’s mismanagement of pre-sale funds—millions of dollars taken from buyers without being used for construction—led to hundreds of uncompleted properties nationwide. This financial misconduct has left the company’s legacy marred by its collapse and the subsequent ripple effects on China’s economy.
