Xu Jiayin sentenced to life imprisonment, Evergrande fined around 2 billion euros

Xu Jiayin, founder of China Evergrande Group, has been sentenced to life imprisonment by a Chinese court. Alongside the businessman’s sentence, the court imposed fines totaling around 2 billion euros on the company and its real estate unit.

The decision was announced by a court in Shenzhen. Xu Jiayin, also known as Hui Ka Yan, was found guilty of several criminal offenses, including misappropriation of funds, fraud during capital raising and the illegal use of public deposits.

In addition to life imprisonment, he was also fined, permanently deprived of his civil rights and ordered to forfeit his personal assets.

China Evergrande Group will pay a fine of 8.82 billion yuan, equivalent to around 1.12 billion euros. Meanwhile, Evergrande Real Estate has been fined 7 billion yuan, or approximately 890 million euros.

As a result, the total fines imposed on the two companies amount to around 2 billion euros. Five other senior group executives have also been sentenced, with fines and prison terms ranging from six to 18 years.

At one time, Xu Jiayin ranked among China’s most powerful entrepreneurs. He built the company that later became one of the biggest names in the country’s real estate industry.

Evergrande, which at one point was China’s largest construction company, plunged into deep financial difficulties and declared bankruptcy in 2021.

At that time, the group’s debts amounted to around 300 billion dollars. As a result, Evergrande became one of the most visible signs of the crisis that engulfed China’s real estate market.

Xu had pleaded guilty in April to eight criminal charges. The sentence handed down now represents one of the most significant moments in the downfall of a businessman who once embodied wealth and success in China.

However, analyses reported by Reuters estimate that the ruling against Xu Jiayin is unlikely to offer much relief to Evergrande’s domestic and foreign creditors. These creditors have suffered considerable losses following the company’s collapse.

Evergrande’s downfall continues to be regarded as one of the biggest episodes of China’s real estate crisis, a sector that is still putting pressure on the world’s second-largest economy.