Evergrande Founder Hui Ka Yan Pleads Guilty to Fundraising Fraud and Bribery

The founder of China Evergrande Group, Hui Ka Yan—once the country's richest person—has pleaded guilty to multiple charges including fundraising fraud and bribery in a Chinese court, marking a decisive chapter in the collapse of the real estate giant that symbolized China's property boom and bust. According to Bloomberg, this admission cements the downfall of the property tycoon whose empire once boasted a stock market valuation exceeding $50 billion, as reported by the BBC.

Evergrande's troubles trace back to aggressive expansion fueled by massive debt, peaking at around $300 billion, which led to a default in late 2021 and a Hong Kong court-ordered liquidation in January. Regulators had long accused Hui of orchestrating financial misconduct, including inflating sales revenue by nearly $78 billion at key subsidiary Hengda Real Estate Group in 2019 and 2020. According to China's securities watchdog, the CSRC, this fraud—where falsified figures made up half or more of reported earnings—enabled the issuance of bonds worth billions, drawing comparisons to historic scandals like Enron but on a vastly larger scale.

Hui's personal fortune, which hit $42 billion in 2017, has plummeted over 98% to under $1 billion amid the crisis. He faced prior penalties from the CSRC, including a $6.5 million fine and a lifetime ban from the securities market, while Hengda was hit with a $583 million penalty. As reported by Fortune, authorities pinned the blame on Hui for instructing staff to falsify results, a move that exacerbated the liquidity crunch when presales—counted as revenue since 2017—turned into liabilities post-default.

This guilty plea affects millions of homebuyers left with unfinished apartments across Evergrande's nearly 300 projects in 139 Chinese cities, from Beijing to Guangzhou. It underscores Beijing's crackdown on securities fraud to protect small investors, following Hui's placement under police surveillance in September 2024 on suspicion of illegal crimes, as noted in earlier Le Monde coverage. The case highlights the opacity in China's real estate sector, where risky practices like those seen in past convictions—such as Anbang's Wu Xiaohui's 18-year fraud sentence—have repeatedly surfaced.

Looking ahead, Evergrande's liquidation process will likely intensify scrutiny on its assets, including ventures like a Chinese Super League football club, while regulators vow tougher enforcement with "teeth and horns." For China's broader property market, still reeling from the crisis, the outcome reinforces efforts to stabilize an industry that once drove a third of the economy but now grapples with widespread developer defaults and buyer distrust.