BEIJING (AP) — Chinese property developer Hui Ka Yan, founder of the Evergrande real estate group, has been sentenced to life in prison and the companies fined a total of $2.3 billion, a court in the southern city of Shenzhen said Thursday.
The decision marks a milestone in Evergrande's saga after it collapsed with more than $300 billion in liabilities when Chinese authorities cracked down on excessive borrowing in the real estate industry in 2020.
That triggered a crunch among many developers and brought on a downturn in the property market that has weighed on the broader economy ever since.
The Shenzhen Intermediate People's Court convicted Hui, also known as Xu Jiayin, and Evergrande of engaged in large-scale financial fraud in inflating the group’s assets and concealing its liabilities.
In a statement, the court also said Hui also abused his position in orchestrating financial fraud and misappropriating company assets.
It also sentenced several other senior Evergrande executives to prison terms of up to 18 years on charges including illegally taking public deposits and fraud, the court said.
Evergrande group was fined 8.82 billion yuan ($1.31 billion) and Evergrande Real Estate Group was fined 7 billion yuan ($1.04 billion), the court said in a statement.
Hui pleaded guilty in April to various charges including illegal absorption of public deposits, fraud and bribery after he was arrested in China.
China Evergrande, founded in 1996, defaulted on its debts in 2021. It was the world’s most heavily indebted real estate developer before it was ordered to liquidate its assets.
Authorities in Hong Kong and mainland China earlier said their investigations found Evergrande had manipulated its financial data by tactics that included prematurely booking revenue from property sales before completion and delivery of the apartments to buyers. Revenues were overstated by roughly $80 billion over 2019 and 2020, they said.
