Hui Ka Yan also forfeits all his personal property and the company he set up is given hefty fines<\/p>\n
The founder of Evergrande, one of China\u2019s largest property developers, has been sentenced to life in prison and had all of his personal property confiscated.<\/p>\n
Hui Ka Yan, 67 and once named by Forbes as China\u2019s richest man, with a net worth of $42.5bn (\u00a331.2bn) in 2017, pleaded guilty in April to eight charges.<\/p>\n
These included misuse of funds, fundraising fraud, illegally taking public deposits, illegally extending loans, fraudulently issuing securities and bribery.<\/p>\n
The company Hui founded, Evergrande Group, was fined 8.8bn yuan (\u00a3950m), while its property arm was fined 7bn yuan, according to Chinese state media.<\/p>\n
Hui\u2019s convictions relate to a debt crisis at Evergrande, which shook China at a time when the government had been trying to make the world\u2019s second-largest economy less reliant on the real estate sector.<\/p>\n
Evergrande, which delisted from the Hong Kong stock exchange last year, has defaulted on most of its $300bn \u200bin liabilities.<\/p>\n
Shenzhen intermediate people\u2019s court in southern China said in its ruling that between 2016 and 2021, Hui \u201cviolated state laws by employing methods such as sustained, large-scale financial fraud to inflate assets and conceal liabilities\u201d.<\/p>\n
It said Hui\u2019s actions had \u201cseverely disrupted the order of the socialist market economy\u201d and \u201ccaused exceptionally heavy economic losses\u201d.<\/p>\n
More than 50 individuals linked to Evergrande were also sentenced on Thursday, with prison terms ranging from 20 months to 18 years.<\/p>\n
Evergrande\u2019s troubles began in 2020 when the Chinese government introduced regulations limiting the amount of debt that property companies could hold. This torpedoed the debt-fuelled real estate sector, which has traditionally accounted for between one-quarter and one-third of China\u2019s GDP.<\/p>\n
Construction stalled on hundreds of property developments as companies scrambled for cash and struggled to pay suppliers amid weak demand during the Covid-19 pandemic. A study published this year estimated that the regulatory crackdown led to about $347bn in sunk costs across the Chinese economy.<\/p>\n
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Hui\u2019s company was at the centre of this crisis. Evergrande\u2019s implosion has been seen as a symbol for the wider troubles in the property sector, which still weighs heavily on the Chinese economy.<\/p>\n
Born to a poor family in rural Henan province, Hui was raised by his grandmother before setting up Evergrande in 1996.<\/p>\n