The trial of China Evergrande Group has recently concluded at the Shenzhen Intermediate People’s Court, with founder and former billionaire Xu Jiayin pleading guilty to multiple charges. The court has reserved its judgment, with legal experts widely expecting he could face life imprisonment.
Prosecutors allege that China Evergrande Group and its subsidiary Evergrande Real Estate were involved in a range of financial and corporate governance violations, including fraudulent fundraising, illegal absorption of public deposits, and fraudulent securities issuance, among a total of eight charges. Xu is also accused of offences including illegal loan issuance, misuse of funds and embezzlement.
During the proceedings, both prosecution and defence presented evidence and arguments, after which the defendant delivered a final statement in court, expressing remorse.
The case involves a vast sum of money and a large number of affected investors, and is regarded as one of the most significant financial risk events in China in recent years. Evergrande was once one of the country’s largest property developers, but collapsed under approximately 2.4 trillion yuan (US$330 billion) in liabilities following years of highly leveraged expansion, triggering a liquidity crisis in 2021.
The company’s liquidation process has progressed slowly. Creditors have filed claims totalling about HK$350 billion, but as of August last year, only around HK$2 billion had been recovered. Market expectations are that recovery rates will remain limited once asset disposals are completed.
Separately, China’s securities regulator has already imposed a lifetime ban on Xu from participating in the securities market.