On March 16, 2018, Chen Yixin, who was then the Secretary of the Wuhan Municipal Party Committee, introduced the planning details of the Yangtze River New City to Xu Jiayin. (Webpage screenshot)
[People News] A significant financial crime case involving China's real estate giant Evergrande Group has reached a pivotal development. From April 13 to 14, the Shenzhen Intermediate People's Court held a public trial for Evergrande Group, Evergrande Real Estate, and its founder Xu Jiayin. Once a contender for the title of China's richest person, Xu Jiayin openly admitted his guilt and expressed remorse during the proceedings. As details from the trial continue to emerge, the staggering debts and capital flows behind the collapse of the Evergrande empire have once again sent shockwaves through the market.
Net Debt of 600 Billion, 100 Billion Yuan in Capital Flows Overseas
According to data revealed during the trial, the immense debt burden of the Evergrande system is alarming, with net liabilities reaching approximately 600 billion yuan. One of the most concerning aspects of the case is the prosecution's claim that around 100 billion yuan was illegally transferred overseas. The destination of this substantial amount, the methods of transfer, and whether it involves money laundering or asset transfer have become central to the court's investigation and the determination of related responsibilities.
As one of the leading companies in China's real estate sector, Evergrande Group operates across various fields, including real estate, finance, and new energy vehicles. However, as the real estate market faces a severe downturn, and due to Evergrande's long-standing reliance on high-leverage operations, the company's capital chain has collapsed, plunging it into a serious debt crisis that has significantly undermined the stability of the financial market and the confidence of many homebuyers.
Analysts have noted that this case not only pertains to the individual responsibilities of companies but also reflects the systemic risks that have accumulated in the real estate sector during its rapid expansion. Key areas of focus moving forward will include defining the responsibilities of corporate executives, regulating capital operations, and enhancing financial oversight.
Market analysts have suggested that the trial of Xu Jiayin represents not just a pursuit of individual corporate wrongdoing but also a 'total reckoning' of the systemic risks that have built up during the rapid growth of China's real estate industry. This case underscores the previous gaps in capital operations and financial regulation concerning large real estate firms. Accurately defining the criminal responsibilities of corporate executives in collective decision-making will be a crucial reference for future legal reforms.
Commentator Cai Shenkun remarked: Xu Jiayin has been out of the picture for many years, and today, a multitude of charges were announced, including Evergrande Group's illegal collection of public deposits, fundraising fraud, illegal loan issuance, fraudulent securities issuance, illegal disclosure of significant information, and bribery. The charges against Evergrande Real Estate Group include fraudulent securities issuance, illegal collection of public deposits by Xu Jiayin, fundraising fraud, illegal loan issuance, illegal fund usage, fraudulent securities issuance, illegal disclosure of important information, embezzlement, and bribery, among others. During the trial, both the prosecution and defence engaged in court investigations and debates regarding the facts of the charges, and the defendant unit, along with Xu Jiayin, provided their final statements. Xu Jiayin admitted his guilt and expressed remorse in court. The court will announce its verdict at a later date. How long will Xu Jiayin be sentenced? Will it be 20 years or life imprisonment? It will also be interesting to see how the numerous high-ranking officials he implicates will be judged.
The tragic conclusion of the 'red elite' and 'white gloves' - 'the people of the Party.'
Chinese law professor Yuan Hongbing, currently residing in Australia, has analysed the case of Evergrande and its chairman Xu Jiayin. He points out that the rise of companies like Evergrande is not merely associated with a specific faction of red aristocrats but is fundamentally linked to the widespread corruption within the Chinese Communist Party (CCP) regime and the intertwining of oligarchic capitalism. This has effectively created a devilish alliance between state power and money. 'The Communist Party utilises state power to support so-called private enterprises like Evergrande, which are essentially the white gloves of corrupt officials within the Party. Consequently, the Communist Party has transformed into a political mafia, while these so-called private entrepreneurs are actually colluding with the corrupt powers of the CCP to seize social wealth; this is the true nature of Evergrande.'
'Xi Jinping now aims to treat all their white gloves as well-fed pigs, systematically preparing to slaughter them to tackle the current economic crisis. Specifically, Xi Jinping intends to confiscate their wealth to fund potential military operations in the Taiwan Strait. Xu Jiayin has committed a serious misstep, which has led to his crackdown.'
Evergrande is the first 'private enterprise' in Guangzhou to establish a CCP committee. Xu Jiayin, who serves as the secretary of the Evergrande Party Committee, frequently emphasises that he is 'a person of the Party' and often claims that his Evergrande is 'the Party's Evergrande.'
Yuan Hongbing stated, "Individuals like Xu Jiayin, who are often labelled as private entrepreneurs, are fundamentally economic pets nurtured by officials of the Communist Party of China. They delude themselves into thinking that the Communist Party regards them as allies. However, in reality, particularly in the eyes of Xi Jinping, figures like Xu Jiayin, regardless of how sycophantically they profess their loyalty to the Party, will not earn Xi Jinping's trust. When the time comes, they will be mercilessly treated like a fat pig ready for slaughter. This encapsulates the tragedy of Xu Jiayin." △
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