Evergrande Founder Pleads Guilty to Fraud in $335 Billion Collapse
Xu Jiayin, who built China Evergrande into the world's most indebted property developer before its 2021 default, pleaded guilty to eight criminal charges including fund-raising fraud and embezzlement at a Shenzhen court.
Xu Jiayin, the founder of China Evergrande Group, pleaded guilty to eight criminal charges at Shenzhen Intermediate People's Court on April 14, ending a two-day trial over the collapse of the world's most indebted property developer.
The charges span the full arc of Evergrande's unraveling: illegal absorption of public deposits, fund-raising fraud, unlawful loan issuance, fraudulent securities issuance, embezzlement, and bribery, according to Xinhua, China's state news agency. Evergrande Group and Evergrande Real Estate Group also face charges as corporate entities.
The court said it would announce its verdict at a later date.
The Scale
Evergrande's liabilities exceeded $335 billion at their peak, making it the most indebted real estate company in history. At the center of the fraud charges: pre-sale deposits collected from buyers of approximately 1.4 million homes that were never finished. Prosecutors allege those funds were diverted to new projects rather than used to complete construction.
The company first defaulted in September 2021, missing $83.5 million in offshore bond payments. A Hong Kong court ordered the company's liquidation in January 2024. China's securities regulator fined Evergrande Real Estate 4.175 billion yuan ($576 million) in March 2024 and imposed a lifetime market ban on Xu.
Eight Charges
Xu personally faces:
| Charge | Description |
|---|---|
| Illegal absorption of public deposits | Taking deposits from homebuyers without proper authorization |
| Fund-raising fraud | Fraudulently raising capital from investors |
| Unlawful loan issuance | Issuing loans outside legal channels |
| Unlawful use of funds | Misappropriating entrusted capital |
| Fraudulent securities issuance | Issuing securities based on false disclosures |
| Illegal disclosure of material information | Concealing the company's true financial position |
| Embezzlement | Personal misappropriation of corporate funds |
| Unit bribery | Paying bribes on behalf of the corporate entity |
Evergrande Group faces six of the same charges. Evergrande Real Estate Group faces a single charge of fraudulent securities issuance.
Context
Xu was detained in September 2023 under "designated residential surveillance" and has been held in Shenzhen detention for roughly two and a half years before the April 2026 trial.
Evergrande's collapse was the first domino in a broader Chinese property crisis that has consumed multiple major developers. The sector's total debt exceeds $5 trillion by some estimates. Xu, once ranked among the wealthiest people in China, had a net worth that Forbes estimated at $42 billion at its 2017 peak.
The guilty plea brings a measure of legal closure to a saga that has left millions of Chinese homebuyers with unfinished apartments and wiped out billions in investor capital. But the sentence -- which could exceed a decade in prison -- remains pending.