HONG KONG: The founder of China Evergrande Group, the world's most indebted property developer, pleaded guilty to charges including misuse of funds, fundraising fraud and illegally taking public deposits, a court in China's southern city of Shenzhen said.
The company has defaulted since 2021 on most of its $300 billion in liabilities, in troubles emblematic of China's property sector woes that have long dragged on economic growth.
Founder Hui Ka Yan "pleaded guilty and expressed remorse" in trial proceedings on Monday and Tuesday against him and Evergrande, the court said in a posting on its official Wechat account.
The liquidators of Evergrande declined to comment on the case.
Reuters was unable to seek comment from Hui, 67, who has not been seen in public since Chinese authorities detained him in 2023, following the default of Evergrande.
VERDICTS TO BE ISSUED LATER
Hui and the company also face charges of illegally extending loans, fraudulently issuing securities and bribery by units, the the Shenzhen Municipal Intermediate People's Court added, with verdicts to be handed down later, though it did not set a date.
The company's failure to repay billions of dollars of wealth management products unleashed frustration among the lower and middle classes, many of whom had investments wiped out, provoking protests and threatening social stability.
Jail for life and confiscation of property are the maximum penalties for illegal fundraising, while bribery can also bring life terms.
In 2024, China's securities regulator fined Hui, formerly one of China's richest men, $6.6 million and barred him from the securities market for life, after finding Evergrande's flagship unit had inflated earnings and committed securities fraud.
A former steel technician, Hui, raised by his grandmother in a rural village in central Henan province, built his fortune on the back of low-priced homes.
After founding Evergrande in 1996, he turned it into China's biggest property developer by contracted sales, aggressively taking on debt.
DABBLED IN ELECTRIC CARS AND SOCCER AMONG NEW VENTURES
He did not shy away from new ventures, dabbling in electric cars and soccer, both a passion of President Xi Jinping.
In 2017, Hui was Asia's richest man with a net worth of $45.3 billion, according to Forbes. By 2023, his net worth was estimated at $3 billion.
In 2024, Evergrande received a liquidation order from a Hong Kong court, and was kicked off the Hong Kong stock exchange last year, bringing an end to a tumultuous boom-and-bust saga.
Outside mainland China, Evergrande's liquidators have battled in court to freeze offshore assets of the founder and his ex-spouse in a struggle to claw back $6 billion in dividends and remuneration paid to Hui and other former executives. - Reuters
