Evergrande's Hui Ka Yan: $80 Billion in Inflated Revenue and a Life Term

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Hui Ka Yan, also known as Xu Jiayin, founded the Hengda Group in Guangzhou in 1996, the company that became China Evergrande Group. Riding the mass migration from countryside to cities, he sold upgraded apartments to upper and middle income buyers. Evergrande's October 2009 Hong Kong IPO raised $722 million and the shares jumped 34 percent on debut. He then spread into unrelated businesses: the Guangzhou Evergrande football club, which won the AFC Champions League in 2013, theme parks, Evergrande Spring mineral water promoted by Jackie Chan, and from 2018 electric vehicles, including investments in Faraday Future and the Hengchi brand. Offshore junk bonds at double-digit interest rates funded the expansion.

When China began a deleveraging campaign in 2016, Evergrande raised cash from pre-sale buyers, from suppliers paid in commercial paper and from its own staff, who were given quotas to sell wealth management products. In 2020 the "three red lines" froze new borrowing for developers that breached them, and Evergrande breached all three. It began missing bond payments in late 2021, reported more than $80 billion in losses for 2021 and 2022, and filed for Chapter 15 protection in New York in August 2023. A Hong Kong court ordered it wound up in January 2024, and it was delisted in 2025. Regulators found revenue overstated by nearly $80 billion across 2019 and 2020, and in August 2026 a Chinese court sentenced Hui to life in prison.

• Evergrande lost billions of yuan on its water business before selling its agribusiness division in 2016.
• Pre-sale payments meant for specific projects were used as a general fund to buy land and finance other ventures.
• The inflated revenue came from booking pre-sale cash as revenue before apartments were delivered.
• Its auditor, PwC, faced fines, operating bans in China and an exodus of partners.
• Hui was convicted of financial fraud, corruption and embezzlement, and all of his personal assets were ordered forfeited.