Xu Jiayin, founder of China’s Evergrande Group, has been found guilty of multiple crimes including fundraising fraud, corporate bribery, and embezzlement, and has been sentenced to life imprisonment by the court.
According to China Central Television News, on Thursday morning, the Shenzhen Intermediate People’s Court in Guangdong Province held a public first-instance judgment session for the defendants: Evergrande Group Co., Ltd. (Evergrande Group), Evergrande Real Estate Group Co., Ltd. (Evergrande Real Estate), and the defendant Xu Jiayin.
The court combined several offenses in its sentencing, imposing a fine of RMB 8.82 billion (approximately MYR 5.294 billion) on Evergrande Group; a fine of RMB 7 billion (approximately MYR 4.2 billion) on Evergrande Real Estate; and sentenced Xu Jiayin to life imprisonment, deprivation of political rights for life, and confiscation of all personal assets. Illegal proceeds will continue to be recovered, and any shortfall must be compensated.
Upon trial, the court ascertained that Xu Jiayin was the actual controller of Evergrande Group, responsible for the group’s overall operations, managing and controlling the defendant companies Evergrande Real Estate, Evergrande Wealth, Evergrande Nanchang, and several others, with investments in real estate, property management, finance, and other sectors.
It was found that between 2016 and 2021, Evergrande Group, Evergrande Real Estate, and Xu Jiayin, in violation of national laws, persistently and on a large scale engaged in financial fraud, inflated assets, concealed liabilities, and committed crimes such as illegal absorption of public deposits, fundraising fraud, fraudulent issuance of securities, and illegal disclosure of important information.
Evergrande Group and Xu Jiayin were also found to have used bribery and other means to gain control of financial institutions, unlawfully acquired credit funds and insurance funds for Evergrande Group’s use, and committed corporate bribery, illegal granting of loans, and illegal use of funds. Xu Jiayin was also found to have used his position as chairman of Evergrande Real Estate to organize financial fraud and embezzle company assets under the guise of dividends.
The court held that the actions of Evergrande Group and Xu Jiayin constituted the crimes of illegal absorption of public deposits, fundraising fraud, illegal granting of loans, securities fraud, illegal disclosure of important information, and corporate bribery; in addition, Xu Jiayin’s actions also constituted illegal use of funds and embezzlement; Evergrande Real Estate’s actions constituted securities fraud. The law requires combined sentencing for multiple offenses.
The court also stated that the criminal acts of Evergrande Group, Evergrande Real Estate, and Xu Jiayin severely disrupted the socialist market economic order, infringed upon property rights of individuals and the public, undermined the integrity of public officials, involved especially huge amounts, were particularly egregious in nature, caused enormous economic losses, and posed extreme societal harm, and should be severely punished.
According to reports, the court rendered the above judgment based on the facts, nature, circumstances, and societal harm of the crimes committed by the defendants. In accordance with laws and judicial interpretations, restitution of losses takes priority over fines and confiscation of property.
On the same day, the Shenzhen Intermediate People’s Court and the Nanshan District People’s Court of Shenzhen also publicly pronounced sentences in cases involving Evergrande Group-related personnel for illegal absorption of public deposits, fundraising fraud, illegal use of funds, etc. Zhen Litao, Ke Peng, Xu Tenghe, Xu Zhijian, Du Liang, Liang Dong, and a total of 56 people were sentenced to prison terms ranging from 18 years to 1 year and 10 months, along with fines or confiscation of property; illegal proceeds are to continue to be recovered, with any shortfall to be compensated.