China’s Evergrande Founder Xu Jiayin Gets Life Sentence, Appears Drastically Aged

On Aug. 20, Xu Jiayin, founder and chairman of China Evergrande Group, was sentenced to life imprisonment, stripped of political rights for life, and ordered to forfeit all of his personal assets. Evergrande Group and Evergrande Real Estate Group were separately fined 8.82 billion yuan and 7 billion yuan, respectively.

Xu, once one of China’s richest men, appeared in court with completely white hair, looking dramatically different from his appearance before his downfall.

According to a report by Chinese Communist Party state media CCTV News, the Shenzhen Intermediate People’s Court in Guangdong Province announced the first-instance verdict against Evergrande Group Co., Ltd., Evergrande Real Estate Group Co., Ltd., and Xu.

The court found that Evergrande Group and Xu had committed a series of financial crimes between 2016 and 2021, including illegally absorbing public deposits, fundraising fraud, illegal issuance of loans, fraudulent issuance of securities, illegal disclosure of material information, and bribery by an entity. Prosecutors alleged that the defendants engaged in persistent, large-scale financial fraud to inflate assets and conceal liabilities.

Evergrande Group and Xu were also accused of using bribery and other means to gain control over financial institutions and improperly obtain credit and insurance funds for Evergrande’s use. Xu was additionally convicted of illegally using funds and embezzling company assets after prosecutors accused him of exploiting his position as chairman of Evergrande Real Estate to organize financial fraud and divert company assets under the guise of dividend payments.

For the best of our weekly content！

You are now signed up for our newsletter

Check your email to complete sign up

Evergrande Real Estate was separately found guilty of fraudulent issuance of securities. The court also ordered the continued recovery of illegal proceeds and restitution for any remaining losses.

On the same day, 56 other people connected to the Evergrande case, including Zhen Litao, Ke Peng, Xu Tenghe, Xu Zhijian, Du Liang, and Liang Dong, were sentenced for offenses including illegally absorbing public deposits, fundraising fraud, and illegal use of funds. Their prison terms ranged from 18 years to one year and 10 months, with additional fines or confiscation of property.

Xu Jiayin was born in 1958 and graduated from Wuhan Iron and Steel Institute in 1982. In 1996, he began building Guangzhou Evergrande Industrial Group Co., Ltd. to develop real estate. The company gradually grew into the Evergrande Group, which expanded into multiple sectors, including real estate, property management, and automobiles. Xu Jiayin was also included on the Forbes China Rich List, Hurun Rich List, and Forbes Global Billionaires List.

The Chinese Communist Party (CCP) bestowed even more honors on Xu, including “100 Outstanding Private Entrepreneurs of the 40 Years of Reform and Opening-Up” and “Outstanding Chinese Entrepreneur for Contributions.” The list of honors he received was extensive. Xu was also a member of the 12th and 13th National Committees of the Chinese People’s Political Consultative Conference (CPPCC), serving as a Standing Committee member of the 13th National CPPCC. These accolades helped lay a solid foundation for Evergrande to become what it calls China’s largest real estate fraud scheme.

A Radio Free Asia report dated Oct. 18, 2023, said that Free WeChat, a website that monitors the deletion of posts and account censorship on China’s internet from overseas, had discovered an article that had been blocked and deleted on WeChat titled “Ten Crimes of Xu Jiayin.” The article stated that by the end of 2022, Evergrande’s total liabilities had reached 2.44 trillion yuan, leaving the company severely insolvent and causing unprecedented losses. 

It listed various problems allegedly caused by Xu Jiayin, including incalculable losses suffered by partner banks and companies, employees and investors losing their life savings, and families being unable to obtain their homes while still having to repay their mortgages. The author argued that the defining characteristics of Xu’s business practices were “making risk nationwide, socializing costs, corporatizing debt, and privatizing profits.”

Qin Peng, an independent U.S.-based current-affairs commentator, previously told Radio Free Asia that Xu Jiayin’s appearances on Tiananmen Gate on two occasions alongside Chinese state leaders during major anniversary celebrations indicated that he had deep political connections. However, given the enormous problems caused by Xu, Qin said that the CCP’s decision to arrest him was politically motivated, intended to demonstrate that the government still cared about ordinary people and that the real problem was supposedly the unscrupulous developer.

Xu Jiayin’s fall from China’s richest man to a convicted prisoner, culminating in a life sentence, marks the apparent collapse of the Evergrande empire under CCP rule and brings what has been described as China’s largest real estate fraud scheme to a dramatic end.