Life Imprisonment for Evergrande Founder as China Slaps US$2bn Fine on Firm

A Chinese court on Thursday handed down a life sentence to Xu Jiayin, the founder of the struggling real estate behemoth Evergrande, while also imposing a hefty fine exceeding US$2 billion on the company and its subsidiary. This judgment comes five years after the firm's significant financial default.

Evergrande Group once stood as a symbol of China's booming real estate sector, fulfilling homeownership aspirations during a property boom that spanned decades. However, the company's access to credit dramatically tightened when the government introduced stricter regulations to curb excessive borrowing and market speculation. The company eventually defaulted on its obligations to creditors in 2021.

On Thursday, a court located in southern China ordered the company and its real estate division to pay a combined fine of 15.82 billion yuan, equivalent to approximately $2.4 billion. Jiayin, also known as Hui Ka Yan in Cantonese, received a life sentence for a range of offenses, including "large-scale financial fraud."

The Shenzhen Intermediate People’s Court in Guangdong province announced via its official WeChat account that "Xu Jiayin was sentenced for multiple crimes and fined, received a life sentence, with political rights revoked for life and all his personal property confiscated."

According to the court, between 2016 and 2021, Evergrande and Jiayin, in his capacity as the company's head, "violated national laws by engaging in continuous, large-scale financial fraud and other means to inflate assets and conceal liabilities." The court further stated that the involved parties "gained control of financial institutions" through acts of bribery, though it did not specify the institutions.

Jiayin had previously pleaded guilty in April to charges that included embezzlement and bribery, as confirmed by the court at the time. Additionally, five other senior executives from Evergrande Group were also sentenced on Thursday, receiving prison terms ranging from six to 18 years for offenses, including fraud, as reported by the Shenzhen court.