Evergrande founder Xu Jiayin sentenced to life in prison in landmark ruling
A Shenzhen court has ordered life imprisonment for the founder of the collapsed property giant and imposed fines exceeding $2 billion, marking the conclusion of legal proceedings against the company.
A court in Shenzhen has sentenced Evergrande Group founder Xu Jiayin to life in prison, concluding the protracted legal proceedings following the collapse of China’s once-leading property developer. The ruling also imposed fines totalling more than $2 billion on Evergrande Group and an affiliate for fraud and other offences, including embezzlement of assets and corporate bribery.
Xu, also known as Hui Ka Yan, pleaded guilty to these charges during a public hearing in April. The verdict follows a series of regulatory and financial penalties, including a $6.5 million fine and a lifetime ban from China’s capital market in 2024 for overstating revenue. The company’s shares were delisted from the Hong Kong Stock Exchange in August 2025 after its valuation had shrunk by 99 per cent.
The sentencing underscores the Chinese government’s stance that it will not bail out the struggling property sector. Analysts view the ruling as a decisive signal to companies that they must remain debt-conscious, particularly as Beijing continues to manage economic challenges such as slowing growth and declining real estate investment.
Evergrande’s collapse has been a major factor in the ongoing downturn in China’s property sector, impacting consumer confidence and affecting peers such as Country Garden, Vanke, and Kaisa. Official data released this week indicates that new-home prices dropped at a faster pace in July than in the previous month, while retail sales declined compared to the same period last year.
The broader slump in the real estate market has forced a shift in economic strategy, with Beijing targeting GDP expansion of between 4.5 and 5.0 per cent for this year, its lowest official goal in decades. Investment in real estate development is down by nearly one-fifth year-on-year through the end of July, highlighting the structural challenges facing the world’s second-largest economy.
While the legal fallout from Evergrande’s implosion has now concluded, the economic repercussions remain significant. The case serves as a cautionary example of the risks associated with aggressive borrowing strategies in a regulatory environment that has moved to limit excessive debt in the property sector.
