Life imprisonment sentenced by the founder of the group Evergrande, Hui Ka Yan, for a series of financial offences associated with the collapse of the Chinese estate giant.
The Court also ordered the seizure of his entire personal property. 67-year-old Hui, who in 2017 had emerged from Forbes as the richest man in China with $42.5 billion property, had pleaded guilty in April to eight counts.
These include capital misappropriation, fundraising fraud, illegal acceptance of deposits by the public, illegal lending, misleading issuance of securities and bribery.
Heavy sanctions were also imposed on companies associated with Hui. Evergrande Group is invited to pay a fine of 8.8 billion Wan, while the group's real estate sector was fined 7 billion Wan.
The case concerns the period during which Evergrande accumulated huge liabilities and was at the heart of the crisis that shocked the Chinese real estate market.
The company has defaulted on repayment of most of its obligations, amounting to approximately $300 billion, deleted last year from the Hong Kong Stock Exchange.
According to the court of Senzain, from 2016 to 2021 Hui used «continuous and large-scale financial fraud» to display enlarged assets and hide liabilities.
Evergrande at the heart of the real estate crisis in China
The court ruled that Hui's actions «They seriously disrupted the class of the socialist market economy» and caused «extremely large economic losses».
Thursday more than 50 persons associated with Evergrande were also convicted, with prison sentences from 20 months to 18 years.
Evergrande's collapse had evolved into a symbol of the deeper crisis that hit the Chinese real estate industry. The problems began to become visible from 2020, when Beijing imposed stricter restrictions on the lending of industry companies.
This decision struck one A model of development based on huge levels of debt and for years was a key pillar of the Chinese economy. The real estate sector is estimated to represent about a quarter to a third of the country's GDP.
As access to new funding was limited, hundreds of construction projects froze. Companies had difficulty paying suppliers and contractors, while demand had already weakened during the pandemic.
A study published this year estimated that the tightening of policy towards excessive lending of the industry led to approximately $ 347 billion of unrecoverable investments in the Chinese economy.
Evergrande was at the heart of this collapse, as its enormous obligations and inability to repay them strengthened fears of a wider transmission of the crisis.
From poor family to top of Chinese business elite
Hui Ka Yan was born into a poor family in the province of Henan and raised with his grandmother. He founded Evergrande in 1996 and Within two decades he turned it into one of the largest real estate development groups in China.
The company's impressive rise brought him to the top of the list of richest Chinese. In 2017 his personal property was valued at $42.5 billion.
For years, his course symbolized the explosive development of the Chinese real estate market, which relied heavily on lending, continued sales of new housing and rapid urbanisation.
In 2018 he himself had publicly thanked the Communist Party of China, Saying he had offered him «Everything Evergrande and I have».
A few years later, the company was at the heart of one of the biggest corporate crises in China's history, with hundreds of billion dollars in debt, unfinished projects and thousands of creditors.
Hui's life sentence and seizure of his property close one of the most impressive chapters of Chinese business development in recent decades.
With information from Guardian
