From the top of the great Chinese fortunes to spending the rest of his life behind bars. A Shenzhen court this Thursday sentenced Xu Jiayin, founder of Evergrande and one of the businessmen who has best represented China's dizzying real estate boom, to life imprisonment. He does so for a long list of financial crimes committed during the group's years of expansion. The sentence, handed down in the first instance, also contemplates the loss of his political rights for life and the confiscation of all his assets.
Xu, 67, also known internationally as Hui Ka Yan, had pleaded guilty and expressed his remorse during the trial held last April. The court considers it proven that between 2016 and 2021 the businessman and the companies he controlled continuously resorted to large-scale financial falsification to inflate assets and hide liabilities. The crimes committed have no end: illegal deposit taking, fraud in obtaining funds and issuing securities, misappropriation, bribery to obtain control of financial institutions and divert credits and funds from insurance companies to the conglomerate, among others.
The condemnation also extends to the companies that built the empire. Evergrande will have to face a fine of 8,820 million yuan, about 1,120 million euros, while its main real estate subsidiary, Evergrande Real Estate, has been fined another 7,000 million yuan, about 890 million euros. Another 56 people linked to the group have received prison sentences of between one year and ten months and 18 years, including at least five former senior managers of the group.
The ruling 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 company before leaving the security of public employment to try his fortune in the south of the country, then the epicenter of economic reforms.
In 1996 he founded Evergrande and found the perfect fuel for growth in China's accelerated urbanization. The company built and sold quickly, used pre-sales to finance new projects, and relied heavily on credit. The system worked while house prices rose and financing flowed. Evergrande ended up becoming one of the country's biggest promoters and Xu, one of the most powerful men in China.
Xu extended his empire far beyond the brick, 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 power, hiring international figures and Marcello Lippi as coach.
His rise reached its peak in 2017. Forbes then estimated Xu's fortune at $45.3 billion (about €38.8 billion), 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 ended up blowing up the model and Evergrande went into default in 2021 with more than $300 billion in liabilities (about €257 billion). Two years later, Xu was taken into custody, and in 2024, a Hong Kong court ordered the group's liquidation. A fall from the highest point that this Thursday finally reached the ground.
