The founder of embattled Chinese property giant Evergrande, Hui Ka Yan, has pleaded guilty to several charges, including fundraising fraud and illegally taking public deposits, a Chinese court has said.
Hui, 67, also known as Xu Jiayin, expressed remorse during a two-day trial this week, the court in Shenzhen, a southern Chinese city, said in a statement on its official WeChat account.
The court said it would announce its verdict at a later date, but did not specify when.
Evergrande was once one of China’s largest property developers — often the second-largest by value, at over $US50 billion ($70.4 billion).
Evergrande was once one of China’s largest property developers — often the second-largest by value. (Reuters: Aly Song)
However, it began to decline when regulators alleged in 2019 and 2020 that it had overstated its revenue by $45.3 billion (about 50 per cent) and $74.1 billion (nearly 80 per cent), respectively.
In January 2024, a Hong Kong court ordered Evergrande to be liquidated after finding that the company, with more than $US300 billion in total liabilities, had failed to reach a restructuring deal with its creditors.
‘Country boy to billionaire’
Raised by his grandmother in a rural village in central Henan province, Hui built his fortune on the back of low-priced homes.
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He was Asia’s richest man with a net worth of $US45.3 billion in 2017, according to Forbes.
After founding Evergrande in Guangzhou in 1996, the former steel technician turned it into China’s biggest property developer by contracted sales, aggressively taking on debt.
In 2023, Hui’s net worth was estimated at $US3 billion, and he was arrested by Chinese authorities in September in the same year on suspicion of “illegal activities” following the collapse of his real estate empire.
More charges faced
Hui’s companies, Evergrande Group and Evergrande Real Estate Group, also faced charges of illegally extending loans, fraudulently issuing securities and corporate bribery, the court added.
Chinese property developer Evergrande faces a $120 billion fraud accusation. Here’s what we know
Outside mainland China, Evergrande’s liquidators have battled in court to freeze offshore assets of the founder and his ex-spouse in a struggle to claw back $US6 billion in dividends and remuneration paid to Hui and other former executives.
Evergrande went beyond property development after announcing in 2021 that it had diversified into industries such as clothing, transportation and health care and had completed the transformation “from real estate to ‘multi-industry and digital technology'”.
It also dabbled in electric vehicles by investing 47.4 billion yuan ($9.8 billion) “in the new energy auto industry to build the world’s largest and strongest new energy auto group”.
The company launched an IPO on the Hong Kong stock exchange market in 2009, and it was officially removed in August last year.
ABC/Reuters
