Skip to content

Biggest fraud in the history of Chinese stock market just happened

Biggest fraud in the history of Chinese stock market just happened
Elmaz Sabovic

As the AI sector continues to make unprecedented gains, driving momentum in the broader stock market, another significant event is unfolding. 

Real estate behemoth Evergrande is facing accusations from the Chinese government for what could be the largest fraud in history.

The Chinese government has alleged that Evergrande and its founder, Hui Ka Yan, committed fraud amounting to $78 billion. It’s claimed that they inflated revenues by this staggering amount before defaulting on their debt.
This fraud is now the largest in financial history, surpassing notorious cases such as Enron, WorldCom, FTX, and even Bernie Madoff’s $68 billion Ponzi scheme.

Some of the biggest frauds in financial history. Source: Barchart
Some of the biggest frauds in financial history. Source: Barchart

What exactly happened with Evergrande?

Evergrande, deeply entrenched in China’s real estate crisis with over $300 billion in debt, faces a critical situation. Liquidators have been appointed to assess Evergrande’s financial state and explore potential restructuring options.

These strategies involve seizing and selling assets to repay debts. However, the Chinese government may hesitate to halt property development, fearing the impact on homeowners waiting for their promised residences. The property market’s struggles are significant, as it contributes about a third of China’s economy.

Since 2021, when authorities implemented borrowing limits for real estate developers, the industry has been under immense financial pressure, leading to numerous debt defaults.

Hui Ka Yan, the company’s CEO, takes most of the blame

In January, a Hong Kong court ordered Evergrande’s liquidation. The China Securities Regulatory Commission (CSRC) largely faulted Hui, previously China’s wealthiest individual, alleging that he instructed staff to inflate Hengda’s yearly results in 2019 and 2020.

Additionally, Hui was fined $6.5 million, as reported in a company filing to the Shenzhen and Shanghai stock exchanges. 

In September of the previous year, Hui, who also serves as the company’s chairman, came under police surveillance during an investigation into suspected crimes.

It’s too early to determine the precise impact of this news on China’s real estate sector and its stock market, let alone whether these consequences will resonate globally. However, one thing is certain: the repercussions of this fraud will not be positive.

Buy stocks now with eToro – trusted and advanced investment platform

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

Best Crypto Exchange for Intermediate Traders and Investors

  • Invest in 70+ cryptocurrencies and 3,000+ other assets including stocks and precious metals.

  • 0% commission on stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit

  • Copy top-performing traders in real time, automatically.

  • eToro USA is registered with FINRA for securities trading.

30+ million Users
eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. eToro USA LLC does not offer CFDs, only real Crypto assets available. Don’t invest unless you’re prepared to lose all the money you invest.

Read Next:

Weekly Finance Digest

By subscribing you agree with Finbold T&C’s & Privacy Policy

Related posts