From the peak of China’s great fortunes to spending the rest of his life behind bars. A Shenzhen court sentenced Xu Jiayin, founder of Evergrande and one of the businessmen who best represented China’s dizzying real estate boom, to life imprisonment this Thursday. This is for a long list of financial crimes committed during the group’s years of expansion. The sentence, issued in the first instance, also includes the loss of his political rights for life and the confiscation of all his assets.
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Xu, 67 years old and internationally known also as Hui Ka Yan, had pleaded guilty and shown remorse during the trial held last April. The court found proven that between 2016 and 2021 the businessman and the companies he controlled continuously resorted to large-scale financial forgery to inflate assets and hide liabilities. The crimes committed are endless: illegal deposit-taking, fraud in obtaining funds and issuing securities, embezzlement, bribes to gain control of financial institutions, and diverting loans and insurance funds to the conglomerate, among others.
The sentence also affects the companies that built the empire. Evergrande must face a fine of 8.82 billion yuan, about 1.12 billion euros, while its main real estate subsidiary, Evergrande Real Estate, has been fined another 7 billion yuan, nearly 890 million euros. Another 56 people linked to the group have received prison sentences ranging from one year and ten months to 18 years, including at least five former top executives of the group.
From humble origins to the Chinese dream
The sentence puts an end to a business career that for years was presented as an example of the Chinese economic miracle. Xu was born in 1958 into a humble family in the rural province of Henan, lost his mother while still a baby, and was raised by his grandmother. He studied metallurgy and worked for a decade in a state steel mill before leaving the security of public employment to try his luck in the south of the country, then the epicenter of economic reforms.
In 1996 he founded Evergrande and found in China’s rapid urbanization the perfect fuel to grow. The company built and sold quickly, used pre-sales to finance new projects, and heavily relied on credit. The system worked while housing prices rose and financing flowed. Evergrande ended up becoming one of the largest developers in the country and Xu, one of the most powerful men in China.
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Xu extended his empire far beyond real estate, with investments in tourism, healthcare, consumer goods, and electric vehicles. One of the most striking investments was football: in 2010 Evergrande bought the Canton club and turned it into an Asian powerhouse, hiring international stars and Marcello Lippi as coach.
His rise reached its peak in 2017. Forbes then estimated Xu’s fortune at 45.3 billion dollars (about 38.8 billion euros), making him the richest man in Asia.
But the empire built by Xu rested on a mountain of debt. The tightening of credit in China in 2020 ultimately blew up the model and Evergrande defaulted in 2021 with more than 300 billion dollars in liabilities (about 257 billion euros). Two years later, Xu was taken into custody and, in 2024, a Hong Kong court ordered the liquidation of the group. A fall from the top that this Thursday has finally hit rock bottom.
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