【Epoch Times, October 10, 2025】The Hong Kong High Court recently authorized the liquidators of Evergrande to take control of assets owned by Xu Jiayin, including properties held in the offshore family trust of Xu Jiayin. This move indicates that the “safe house” of overseas assets totaling $23 billion built by Xu Jiayin has been breached.
In a judgment on September 16, the Hong Kong High Court ruled on the case of Xu Jiayin’s family trust. The court not only authorized the liquidators to take control of assets belonging to Xu Jiayin, but also brought assets held through the offshore family trust under the liquidation scope.
For a long time, offshore family trusts have been considered a “standard tool” for the wealthy due to their functions such as “asset protection” and “tax optimization”, and have even been misunderstood by some as a “debt avoidance tool.” The recent judgment by the Hong Kong High Court highlights that the core value of trusts lies in “legitimate and compliant wealth planning” rather than being a “haven for debt avoidance”.
On October 9, Manager Magazine stated that when trusts are used to evade debtor responsibilities and defraud creditors, the “asset protection” firewall will be completely breached by the law. This action freezes Xu Jiayin’s potential overseas assets of up to $5 billion, shattering the long-held fantasy of some that “overseas trusts are absolutely safe”.
Fenghuang Financial, Corporate Research Institute, on October 10, quoted comments from Chen Liya, a senior partner at Zhi Gao Law Firm, director of the Zhi Gao Family Office Committee, and director of the Zhi Gao Wealth Inheritance Center, saying that the claim “offshore trusts are absolutely safe” is a marketing tactic rather than a legal conclusion. The security of a trust depends on the independence of its structure and the legitimacy of its establishment purpose. The necessary prerequisites for achieving “asset protection” include clean sources of trust funds, the complete abandonment of control by the settlor (no retention of revocation rights or investment instructions), independence and supervision qualifications of the trustee without any relationship with the settlor’s interests, transparent beneficiary rights, a reasonable distribution mechanism, and the trust must not have been established in known or foreseeable debt risks. If any condition is missing, the court may deem the trust not matching its name and reality, thus “piercing the trust barrier”.
Fenghuang Financial, Corporate Research Institute noted that the Hong Kong court “pierced” Xu Jiayin’s family trust based on the principles of “substance over form” and “fraudulent asset transfer”. Firstly, the “substance over form” principle states that regardless of how complex the trust structure is, if the settlor can effectively control the assets, it is not a genuinely independent trust; secondly, the “anti-fraud principle” dictates that debtors cannot owe large debts while using a trust to retain wealth for their families; lastly, the “priority of creditor protection” principle leans more towards protecting the rights of ordinary creditors owed wages or housing payments in a large-scale debt crisis.
Public records show that since Evergrande went public (2009-2022), Xu Jiayin and Ding Yumei collectively received over 50 billion RMB in dividends. The main source of funds for Xu Jiayin’s family trust comes from these huge dividends, and at that time, Evergrande was heavily indebted, with potential debt risks. The purpose of establishing the trust was to achieve intergenerational wealth inheritance and asset protection for the family, shielding family assets from the responsibility of debtors in times of debt risk.
Manager Magazine revealed that around 2019, Xu Jiayin and Ding Yumei set up a single-family trust fund amounting to $23 billion in the United States, designating their two sons as beneficiaries. Mainland Chinese media “Financial Tales Galore” on October 9 stated that the Chinese authorities have confirmed Evergrande’s financial fraud in 2019 and 2020, while Xu Jiayin established the trust in 2019. Clearly aware of the company’s debt issues and an impending crisis, Xu Jiayin still urgently set up the trust, confirming the fact of his fraudulent asset transfer.
In 2021, Evergrande faced debt defaults. In early 2024, the Hong Kong High Court officially ordered the liquidation of Evergrande and appointed Edward Middleton and Huang Yung-sze from Alvarez & Marsal as liquidators. On August 25, 2025, Evergrande was officially delisted from the Hong Kong Stock Exchange, ending its 16-year listing journey on the stock market with substantial debts.