Recently, there have been revelations made by anonymous sources to foreign media regarding the founder of China’s Evergrande Group, Xu Jiayin, who was reportedly transferred to a special detention facility in Shenzhen several months ago. Xu Jiayin has not made any public appearances since being taken away by the Chinese Communist Party authorities a year ago.
According to a report by Reuters on September 12, one insider disclosed that after being arrested, Xu Jiayin was initially under house arrest in Beijing. Another source mentioned that a few months ago, he was moved to Shenzhen in order to facilitate communication with Evergrande executives. While Evergrande’s headquarters are located in Guangzhou, its wealth management division is based in Shenzhen.
The insider also mentioned that Xu Jiayin is currently in “good physical condition” and is receiving medical care and enjoying good food at the special detention facility.
It is said that after being transferred to this special facility, Xu Jiayin wrote a letter to Evergrande executives, urging them to promptly address the issue of unpaid returns to investors of their financial products.
Due to the sensitivity of the situation, both sources have declined to reveal their identities.
The Chinese Public Security Bureau, Shenzhen municipal government, and major subsidiaries of the Evergrande Group, including Evergrande Real Estate, have all refrained from commenting on the matter in response to requests for input from Reuters. The liquidators appointed by the Hong Kong court for the Evergrande Group also declined to comment.
Xu Jiayin, aged 65, was once China’s richest man. His founded Evergrande Group encountered a debt crisis in 2021, owing a total of over 1.96 trillion yuan to suppliers, creditors, and investors. By the end of 2022, the total debt amounted to 2.44 trillion yuan.
On August 17, 2023, Evergrande Group filed for bankruptcy protection in New York, USA. On September 28 of the same year, Evergrande Group announced on the Hong Kong Stock Exchange that Chairman Xu Jiayin was subject to coercive measures due to suspected illegal activities. Trading of shares of Evergrande Group and its subsidiaries, including Evergrande Property Services Group Limited and Evergrande New Energy Vehicle Group Limited, was completely suspended.
In March of this year, after a regulatory investigation found that a subsidiary of Evergrande had inflated its income and committed securities fraud, Xu Jiayin was fined 47 million yuan and permanently banned from the securities market. Evergrande was fined nearly 4.2 billion yuan and ordered to liquidate in January.
As of now, Xu Jiayin has not faced any formal charges, and it remains unclear how long he will be detained, or whether he will face trial or be released.