China's Evergrande Founder Gets Life Sentence for Fraud; Group Fined Billions

Xu Jiayin, the founder of China's property giant Evergrande, has been sentenced to life in prison for a series of financial crimes, including illegally attracting public deposits and fraud. The Shenzhen Intermediate People's Court in Guangdong province also stripped him of his political rights for life and ordered the confiscation of all his personal assets.

The court found Xu and Evergrande guilty of manipulating finances between 2016 and 2021 to inflate assets and conceal liabilities, actions that the court deemed a severe disruption to the socialist market economy. The ruling stated that Xu, using his position as chairman of Evergrande Real Estate, orchestrated financial manipulations and embezzled company assets under the guise of dividends. The company's crimes extended beyond its real estate business into the financial sector, with the court noting that Xu and Evergrande secured control over financial institutions through bribery to illegally divert loan and insurance funds for the group's use.

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The court found that Xu and Evergrande manipulated finances to inflate assets and hide debt, severely disrupting the socialist market economy.

In addition to Xu's life sentence, Evergrande Group was fined 8.82 billion yuan (approximately $1.2 billion) and Evergrande Real Estate was fined 7 billion yuan (approximately $970 million). The court prioritized the repayment and compensation of victims' losses over the fines and asset confiscations. Fifty-six other Evergrande-related individuals received sentences ranging from 1 year and 10 months to 18 years.

Evergrande, once China's largest real estate developer, grew rapidly by leveraging massive borrowing and pre-sales during the country's property boom. However, the company faced a severe liquidity crisis starting in 2020 after Beijing implemented regulations on property developers' borrowing. This led to a default on its debts the following year. The company was subsequently ordered to be liquidated by a Hong Kong court in 2024 and was delisted from the Hong Kong stock exchange last year.

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The court prioritized the repayment and compensation of victims' losses over the fines and asset confiscations.