Hui Ka Yan, founder of Evergrande, has pleaded guilty to charges including fundraising fraud, according to a court statement. Hui Ka Yan and Evergrande also face charges of illegally extending loans, fraudulently issuing securities, and bribery by units, according to the same statement. The trial proceedings took place at a court in Shenzhen, China, where the court said Hui Ka Yan expressed remorse. Verdicts will be handed down later, with no date set. Maximum penalties for illegal fundraising include life imprisonment and confiscation of property, while bribery can also bring life terms, according to multiple reports.
Evergrande defaulted on most of its $300 billion in liabilities in 2021, making it the world's most indebted property developer. Evergrande's failure to repay wealth management products caused frustration among lower and middle classes, leading to protests and threatening social stability. The company's collapse has had significant social and economic repercussions across China.
Hui Ka Yan has not been seen in public since Chinese authorities detained him in 2023. In 2024, China's securities regulator fined Hui Ka Yan $6.6 million and barred him from the securities market for life for inflating earnings and securities fraud, according to multiple reports. These regulatory actions preceded the current criminal proceedings.
Evergrande received a liquidation order from a Hong Kong court in 2024 and was kicked off the Hong Kong stock exchange last year. Evergrande's liquidators are battling in court to freeze offshore assets of Hui Ka Yan and his ex-spouse to claw back $6 billion in dividends and remuneration. The liquidation process represents ongoing efforts to recover assets from the company's collapse.
Hui Ka Yan was Asia's richest person in 2017 with a net worth of $45.3 billion, but by 2023 his net worth was estimated at $3 billion. He was a former steelworker and steel factory technician who founded Evergrande in 1996, according to multiple reports. His dramatic rise and fall symbolize the broader challenges in China's property sector.