China moves to wrap up saga of troubled property giant Evergrande after founder gets life sentence

Chinese officials are working towards concluding the fallout from the collapse of Evergrande, the once-mighty real estate conglomerate that owes around $300 billion. A court in Guangzhou accepted a bankruptcy liquidation case involving Evergrande's Chinese property division, which, according to industry data, held most of the company's debt.

On the same day, Hui Kan Yan, the 67-year-old founder of China Evergrande, received a life sentence for financial crimes in Shenzhen. Multiple other individuals connected to the group, including Hui's sons, were also given prison terms ranging from up to 18 years.

These recent developments indicate that the Chinese government may have a plan in place to wrap up the Evergrande story, according to Foreky Wong, a restructuring specialist at Fortune Ark. However, Wong noted that the bankruptcy process will likely drag on, given the size and complexity of the company.

The real estate market, once a key driver of China's economic growth and once representing roughly a quarter of the nation's GDP, remains in a slump. Home prices have dropped by around 20% or more since 2021 and signs of a full recovery have been rare. The issue is exacerbated by a shortage of supply in many smaller cities, coupled with a broader economic slowdown dampening consumer spending.