China sentenced the founder of embattled property giant Evergrande to life in prison and fined the group more than $2 billion on Thursday for offences including fraud, five years after a high-profile default.
Evergrande Group was once the face of Chinese real estate, surfing a decades-long property boom as it peddled home-ownership dreams.
But its access to credit dramatically narrowed when the government introduced curbs on excessive borrowing and speculation.
The company defaulted in 2021 after struggling to repay creditors.
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On Thursday, August 20, a court in southern China fined the firm and its real estate arm a total of 15.82 billion yuan ($2.4 billion).
It issued a life sentence against founder Xu Jiayin, also known as Hui Ka Yan in Cantonese, for crimes including “large-scale financial fraud”, the Shenzhen Intermediate People’s Court in Guangdong province said in a post on its WeChat account.
“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,” it said.
Between 2016 and 2021, Evergrande and Xu as its boss “violated national laws by engaging in continuous, large-scale financial fraud and other means to inflate assets and conceal liabilities”, the court said.
It added that the parties “gained control of financial institutions” through bribery, without naming the institutions.
Xu pleaded guilty in April to charges that also included embezzlement and bribery, the court said at the time.
Serious social harm
The verdict caps 67-year-old Xu’s spectacular fall from grace.
He was once one of China’s richest billionaires and a member of the Communist Party’s top political advisory body.
On Thursday, a before-and-after photomontage was being widely shared on social media — the older image, taken years ago as, shows Xu beaming following a meeting of the Chinese People’s Political Consultative Conference, with jet black hair, and wearing a gold Hermes belt.
It was contrasted with a picture released by the court on Thursday, in which a worn, white-haired Xu stood unsmiling, flanked by two police officers as he faced a panel of judges.
Xu and Evergrande’s actions “seriously disrupted the socialist market economic order… and undermined the integrity of official conduct by state personnel”, the court said.
“The circumstances were particularly egregious, causing particularly serious economic losses and causing particularly serious social harm,” it added.
The court said some lawmakers and political advisers as well as relatives of the defendants attended the verdict.
Observers assessing the health of the world’s second-largest economy have been closely following Evergrande’s saga and similar issues faced by other property giants including Country Garden and Vanke.
New home prices in China have been contracting for three years.
Five other senior executives of Evergrande Group were also sentenced Thursday to prison terms ranging from six to 18 years for crimes including fraud, the Shenzhen court said.
A total of 56 people were given jail sentences, with the shortest term one year and 10 months, China’s state news agency Xinhua reported.
The court also ordered that remaining shortfalls from illegal gains be returned.
Source: Khaleej Times