<p>Evergrande founder Hui Ka Yan pleaded guilty to multiple fraud charges in a landmark trial that marks another chapter in the spectacular collapse of what was once China’s largest real estate developer. Also known as Xu Jiayin, the 67-year-old stood trial alongside the company he founded. At the Shenzhen Intermediate People’s Court, he pleaded guilty to all fraud charges and expressed remorse in his final statement. He might receive a life term in jail and confiscation of property for some of the serious charges, such as illegal fundraising and bribery. The verdict is awaited. How did Evergrande collapse? Here is that story:</p><h2>A fundraising fraud: Charges against Hui Ka Yan and Evergrande</h2><p>Hui and Evergrande faced charges of taking deposits from the public without authorisation.<br>The fundraising fraud included misuse or embezzlement of corporate assets and funds.<br>They were also charged with illegally issuing or extending loans and the fraudulent issuance of securities. Other charges include corporate bribery.</p><p>Evergrande diverted pre-sale funds paid up by homebuyers for construction of projects to new projects instead, leading to hundreds of unfinished properties across China.</p><p>Regulatory findings from 2024 showed the company had inflated 2019 and 2020 revenues by a combined 564 billion yuan, or nearly $78 billion, enabling fraudulent bond issuance.</p><p>Hui was detained by authorities in September 2023 on suspicion of the crimes. In March 2024, China’s securities regulator, CSRC, fined him 47 million yuan, or around $6.5 million, banned him for life from the securities market, and penalised the company heavily for the accounting fraud.</p><p>Liquidators are seeking recovery of $6 billion in dividends and remuneration paid to Hui and his former spouse.</p><p>Also read: <a href="https://www.wionews.com/world/chinese-real-estate-firm-evergrandes-shares-dive-after-chairman-hui-ka-yan-cuts-stake-432892">Chinese real estate firm Evergrande's shares dive after Chairman Hui Ka Yan cuts stake</a></p><p>&nbsp;</p><h2>How Hui rose to be Asia’s richest man, with Evergrande fortunes</h2><p>Born into poverty in the rural Henan province and raised by his grandmother, Hui went on to build Evergrande, founded in 1996, into a real estate empire. The Guangzhou-based company, at its peak, was valued at over $50 billion. In 2017, Hui was Asia’s richest person, with a net worth of $42.5 billion.</p><p>Under Hui, Evergrande expanded aggressively into electric vehicles, football, food and drinks, and other sectors.</p><h2>Evergrande: How China’s biggest real estate firm collapsed</h2><p>Evergrande’s downfall was the result of a classic high-leverage real estate model that continued until regulators stepped in.<br>The business model was debt-fuelled. Having borrowed heavily to buy land, Evergrande pre-sold unfinished apartments to buyers who often paid up to 90 per cent upfront. This money was then used to buy more land.</p><p>This continuous expansion loop model worked during China’s property boom, and by 2020, Evergrande became China’s largest developer.</p><p>Also read: <a href="https://www.wionews.com/business-economy/ditched-by-communist-party-chinese-billionaire-loses-93-per-cent-of-fortune-554153">Ditched by Communist Party, Chinese billionaire loses 93 per cent of his fortune</a></p><p>&nbsp;</p><h2>Evergrande failed China’s ‘Three Red Lines’ test</h2><p>Things changed with China’s “Three Red Lines” policy in 2020. This imposed debt limits for developers to curb systemic risks.<br>The three aspects were: debt-to-asset ratio should be less than or equal to 70 per cent; net debt-to-equity ratio should be 100 per cent; and cash-to-short-term debt ratio should be greater than 1.<br>Evergrande failed all three of the red line tests.<br>Its borrowing ability was severely restricted, cutting off its lifeblood.</p><h2>A liquidity crisis and default of Evergrande, 2021</h2><p>Under regulatory scrutiny, Evergrande could neither borrow nor complete its projects. Even as the Covid pandemic hit China and the rest of the world, Evergrande stopped paying suppliers and contractors and halted construction on many sites. In late 2021, Evergrande defaulted on paying interest on offshore bonds. Soon, its total liabilities reached 2.39 trillion yuan, or $330 billion, equivalent to around 2 per cent of China’s GDP. Evergrande owed foreign creditors around $25 billion.</p><h2>Evergrande almost brought down the entire real estate sector in China</h2><p>Nearly 1 million homebuyers were left with unfinished apartments across 1,300 Evergrande projects in 280 cities. Mass protests and more than 1,300 lawsuits followed. Evergrande was the first domino: more than 50 other real estate developers defaulted on debt payments. In August 2025, Evergrande was delisted from the Hong Kong Stock Exchange after its shares lost nearly 99 per cent of their value. Talks for debt restructuring collapsed, and in 2024, a Hong Kong court ordered liquidation of Evergrande, the largest in Chinese corporate history.</p><p>&nbsp;</p><p><a href="https://www.wionews.com/videos/china-evergrande-delisted-china-s-300-billion-property-collapse-1756142932647/embed">https://www.wionews.com/videos/china-evergrande-delisted-china-s-300-billion-property-collapse-1756142932647/embed</a></p><h2>Accounting fraud behind Evergrande collapse</h2><p>To keep borrowing and meet targets, Evergrande forged sales and profit numbers. Hundreds of billions of yuan were overstated. This allowed it to continue issuing bonds while hiding the true debt burden.The guilty plea cemented Hui’s personal accountability.</p><p>Evergrande liquidation proceedings are continuing. Unfinished projects may be completed or sold to other developers with regulatory support.<br>But Evergrande and Hui have become a cautionary tale for China’s property market that once overheated. The realities of Chinese household wealth, local government finances, and investor confidence were also exposed by the fall of Evergrande.&nbsp;</p><p>The saga is seen as a symbol of the end of China’s debt-fuelled real estate boom era.</p>

Evergrande founder Hui Ka Yan pleaded guilty to fraud as China’s biggest property developer collapsed under massive debt. Accounting fraud and unfinished projects at Evergrande had triggered a wider real estate crisis in China. Here is the story of its fall

Evergrande founder Hui Ka Yan pleaded guilty to multiple fraud charges in a landmark trial that marks another chapter in the spectacular collapse of what was once China’s largest real estate developer. Also known as Xu Jiayin, the 67-year-old stood trial alongside the company he founded. At the Shenzhen Intermediate People’s Court, he pleaded guilty to all fraud charges and expressed remorse in his final statement. He might receive a life term in jail and confiscation of property for some of the serious charges, such as illegal fundraising and bribery. The verdict is awaited. How did Evergrande collapse? Here is that story: A fundraising fraud: Charges against Hui Ka Yan and Evergrande Hui and Evergrande faced charges of taking deposits from the public without authorisation. The fundraising fraud included misuse or embezzlement of corporate assets and funds. They were also charged with illegally issuing or extending loans and the fraudulent issuance of securities. Other charges include corporate bribery. Evergrande diverted pre-sale funds paid up by homebuyers for construction of projects to new projects instead, leading to hundreds of unfinished properties across China. Regulatory findings from 2024 showed the company had inflated 2019 and 2020 revenues by a combined 564 billion yuan, or nearly $78 billion, enabling fraudulent bond issuance. Hui was detained by authorities in September 2023 on suspicion of the crimes. In March 2024, China’s securities regulator, CSRC, fined him 47 million yuan, or around $6.5 million, banned him for life from the securities market, and penalised the company heavily for the accounting fraud. Liquidators are seeking recovery of $6 billion in dividends and remuneration paid to Hui and his former spouse. Also read: Chinese real estate firm Evergrande's shares dive after Chairman Hui Ka Yan cuts stake How Hui rose to be Asia’s richest man, with Evergrande fortunes Born into poverty in the rural Henan province and raised by his grandmother, Hui went on to build Evergrande, founded in 1996, into a real estate empire. The Guangzhou-based company, at its peak, was valued at over $50 billion. In 2017, Hui was Asia’s richest person, with a net worth of $42.5 billion. Under Hui, Evergrande expanded aggressively into electric vehicles, football, food and drinks, and other sectors. Evergrande: How China’s biggest real estate firm collapsed Evergrande’s downfall was the result of a classic high-leverage real estate model that continued until regulators stepped in. The business model was debt-fuelled. Having borrowed heavily to buy land, Evergrande pre-sold unfinished apartments to buyers who often paid up to 90 per cent upfront. This money was then used to buy more land. This continuous expansion loop model worked during China’s property boom, and by 2020, Evergrande became China’s largest developer. Also read: Ditched by Communist Party, Chinese billionaire loses 93 per cent of his fortune Evergrande failed China’s ‘Three Red Lines’ test Things changed with China’s “Three Red Lines” policy in 2020. This imposed debt limits for developers to curb systemic risks. The three aspects were: debt-to-asset ratio should be less than or equal to 70 per cent; net debt-to-equity ratio should be 100 per cent; and cash-to-short-term debt ratio should be greater than 1. Evergrande failed all three of the red line tests. Its borrowing ability was severely restricted, cutting off its lifeblood. A liquidity crisis and default of Evergrande, 2021 Under regulatory scrutiny, Evergrande could neither borrow nor complete its projects. Even as the Covid pandemic hit China and the rest of the world, Evergrande stopped paying suppliers and contractors and halted construction on many sites. In late 2021, Evergrande defaulted on paying interest on offshore bonds. Soon, its total liabilities reached 2.39 trillion yuan, or $330 billion, equivalent to around 2 per cent of China’s GDP. Evergrande owed foreign creditors around $25 billion. Evergrande almost brought down the entire real estate sector in China Nearly 1 million homebuyers were left with unfinished apartments across 1,300 Evergrande projects in 280 cities. Mass protests and more than 1,300 lawsuits followed. Evergrande was the first domino: more than 50 other real estate developers defaulted on debt payments. In August 2025, Evergrande was delisted from the Hong Kong Stock Exchange after its shares lost nearly 99 per cent of their value. Talks for debt restructuring collapsed, and in 2024, a Hong Kong court ordered liquidation of Evergrande, the largest in Chinese corporate history. https://www.wionews.com/videos/china-evergrande-delisted-china-s-300-billion-property-collapse-1756142932647/embed Accounting fraud behind Evergrande collapse To keep borrowing and meet targets, Evergrande forged sales and profit numbers. Hundreds of billions of yuan were overstated. This allowed it to continue issuing bonds while hiding the true debt burden.The guilty plea cemented Hui’s personal accountability. Evergrande liquidation proceedings are continuing. Unfinished projects may be completed or sold to other developers with regulatory support. But Evergrande and Hui have become a cautionary tale for China’s property market that once overheated. The realities of Chinese household wealth, local government finances, and investor confidence were also exposed by the fall of Evergrande. The saga is seen as a symbol of the end of China’s debt-fuelled real estate boom era.

<p>Evergrande founder Hui Ka Yan pleaded guilty to fraud as China’s biggest property developer collapsed under massive debt. Accounting fraud and unfinished projects at Evergrande had triggered a wider real estate crisis in China. Here is the story of its fall</p>

Evergrande founder Hui Ka Yan pleads guilty to fraud: How China’s biggest real estate firm went down due to greed and debt

<p>Chinese billionaire Hui Ka Yan's wealth has diminished to $3 billion from $42 billion in 2017-2018, Bloomberg Billionaire Index showed. The chairman of the China Evergrande Group, once the second richest person in Asia, was known to be the bridge between the Chinese elite's world of business and the country’s political power centres.</p>

<p>The Bloomberg Billionaire Index further showed that China’s five richest property tycoons lost about $65 billion combined in the past two years.&nbsp;</p>

<p>Hui Ka Yan’s lost fortune has been attributed to China’s credit crunch that made the country's real estate business the biggest casualty amid the crisis stoked by COVID-19 pandemic and Beijing’s authoritarian restrictions that choked growth of businesses in the country.</p>

<p><strong>ALSO READ |&nbsp;<a href="https://www.wionews.com/world/china-evergrande-chairman-yans-hong-kong-mansion-seized-by-ccb-over-dues-530971">China: Evergrande chairman Hui Ka Yan's Hong Kong mansion seized by CCB over dues</a></strong></p>

<p>In Evergrande group, Hui Ka Yan currently helms over one of China’s biggest and most indebted real estate developers. The company has over 800 projects in more than 280 cities in China and beyond but is struggling to repay $300 billion in liabilities.</p>

<p><strong>Hui Ka Yan’s lost fortune: Ditched by the Communist Party elite?</strong></p>

<p>Since 2008, Hui had been part of the Chinese People’s Political Consultative Conference (CPPCC) – the upper house of Chinese Communist Party’s Politburo – consisting of a 300-member elite group with government officials and business tycoons as its members.&nbsp;</p>

<p><b>ALSO WATCH |&nbsp;<a href="https://www.wionews.com/videos/wion-business-news-chinas-evergrande-loses-770-million-in-hong-kong-deal-531789">WION Business News | China's Evergrande loses $770 million in Hong Kong deal</a></b></p>

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<p>CPPCC acts as an advisory body to the National People’s Congress (the legislature) in Beijing. But unlike the upper houses of traditional democracies (such as India's Rajya Sabha) they are known to function as nominal bodies, rarely turning down government bills. CPPCC’s annual convention, however, provides a small but confined space for debate within Beijing’s power centres. The group dwells upon everything from political and social issues to new laws and the nation’s growth.</p>

<p><strong>Hui Ka Yan excluded from CPPCC&nbsp;</strong></p>

<p>Hui was told to not attend CPPCC annual convention in March 2022.&nbsp;He has now been excluded from the latest list of the individuals who will form the CPPCC for the next five years. At least five other prominent real estate industrialists were excluded from the CPPCC listing, Bloomberg reported.&nbsp;</p>

<p>The new CPPCC members will meet in Beijing in March for the group’s 14th National Committee.&nbsp;</p>

<p>President Xi Jinping’s “common prosperity” drive to redistribute wealth has led to cracks in several industries. For the real estate sector, the imposition of a strict “three red lines” policy to reduce debt has furthered a crisis that’s affecting banks, trust firms and millions of homeowners.</p>

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Chinese billionaire Hui Ka Yan's wealth has diminished to $3 billion from $42 billion in 2017-2018, Bloomberg Billionaire Index showed. The chairman of the China Evergrande Group, once the second richest person in Asia, was known to be the bridge between the Chinese elite's world of business and the country’s political power centres.

Chinese billionaire Hui Ka Yan's wealth has diminished to $3 billion from $42 billion in 2017-2018, Bloomberg Billionaire Index showed. The chairman of the China Evergrande Group, once the second richest person in Asia, was known to be the bridge between the Chinese elite's world of business and the country’s political power centres. The Bloomberg Billionaire Index further showed that China’s five richest property tycoons lost about $65 billion combined in the past two years. Hui Ka Yan’s lost fortune has been attributed to China’s credit crunch that made the country's real estate business the biggest casualty amid the crisis stoked by COVID-19 pandemic and Beijing’s authoritarian restrictions that choked growth of businesses in the country. ALSO READ | China: Evergrande chairman Hui Ka Yan's Hong Kong mansion seized by CCB over dues In Evergrande group, Hui Ka Yan currently helms over one of China’s biggest and most indebted real estate developers. The company has over 800 projects in more than 280 cities in China and beyond but is struggling to repay $300 billion in liabilities. Hui Ka Yan’s lost fortune: Ditched by the Communist Party elite? Since 2008, Hui had been part of the Chinese People’s Political Consultative Conference (CPPCC) – the upper house of Chinese Communist Party’s Politburo – consisting of a 300-member elite group with government officials and business tycoons as its members. ALSO WATCH | WION Business News | China's Evergrande loses $770 million in Hong Kong deal × CPPCC acts as an advisory body to the National People’s Congress (the legislature) in Beijing. But unlike the upper houses of traditional democracies (such as India's Rajya Sabha) they are known to function as nominal bodies, rarely turning down government bills. CPPCC’s annual convention, however, provides a small but confined space for debate within Beijing’s power centres. The group dwells upon everything from political and social issues to new laws and the nation’s growth. Hui Ka Yan excluded from CPPCC Hui was told to not attend CPPCC annual convention in March 2022. He has now been excluded from the latest list of the individuals who will form the CPPCC for the next five years. At least five other prominent real estate industrialists were excluded from the CPPCC listing, Bloomberg reported. The new CPPCC members will meet in Beijing in March for the group’s 14th National Committee. President Xi Jinping’s “common prosperity” drive to redistribute wealth has led to cracks in several industries. For the real estate sector, the imposition of a strict “three red lines” policy to reduce debt has furthered a crisis that’s affecting banks, trust firms and millions of homeowners. WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

Ditched by Communist Party, Chinese billionaire loses 93 per cent of his fortune

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Evergrande founder Hui Ka Yan pleads guilty to fraud: How China’s biggest real estate firm went down due to greed and debt

Ditched by Communist Party, Chinese billionaire loses 93 per cent of his fortune