More than five years after his mysterious disappearance from a luxury hotel in Hong Kong, a Chinese-Canadian billionaire and once-trusted financier of China’s political elite has been put on trial in a case that epitomizes the ruling Communist Party’s attempts to recreate an earlier era of free-spirited capitalism.
The Chinese authorities have not released details about the charges against the financier, Xiao Jianhua. The Canadian embassy in Beijing said in an emailed statement it was aware of Monday’s trial and was closely monitoring the case. The embassy added that it provides consular services to Mr. Xiao and will continue to push for consular access, but declined to provide more information out of concern for Mr. Xiao’s privacy, it said.
There was no immediate indication of how long Mr. Xiao would last. Chinese courts rarely find defendants innocent, meaning he will almost certainly be convicted.
The case of Mr. Xiao is widely seen as part of the Chinese government’s ongoing campaign to curb the debt-driven surplus that has fueled much of the country’s economic growth in recent decades. In 2020, Chinese authorities seized nine companies worth hundreds of billions of dollars affiliated with Tomorrow Group. That is the holding company behind Mr. Xiao, which he has built over the course of two decades, thanks in part to his high-level political connections.
By seizing control of two securities firms and a futures company in 2020, the Chinese securities regulator accused the companies of providing misleading information about their shareholders and controller. In July 2021, regulators extended the seizure of the nine companies for another year to “further promote risk removal and defuse financial risks”. The Tomorrow Group conglomerate also had interests in state-dominated industries, including banking, insurance, coal, cement, real estate and rare earths.
Other than the takeover announcements, Chinese authorities have said little about Mr Xiao’s case. For years, nothing was officially known about his whereabouts after he was snatched from his apartment at the Four Seasons Hotel in Hong Kong in 2017 by half a dozen unidentified men in wheelchairs. It was not until 2020 that Tomorrow Group confirmed that Mr. Xiao was in the mainland and cooperating with the government’s efforts to restructure the conglomerate.
The Tomorrow Group did not respond to an emailed request for comment on Monday.
The secrecy surrounding Mr Xiao’s case may be partly related to the sensitivity of the information he likely possesses. Mr Xiao was well positioned to know about the secret wealth of China’s top officials after diligently courting political elites, including the family of the country’s current leader Xi Jinping.
The disappearance of Mr. Xiao took place as fears mounted over Chinese interference in Hong Kong in violation of the “one country, two systems” framework intended to ensure a high degree of autonomy for the territory, as well as freedom from Chinese interference in the territory. mainland. Just a year after five booksellers disappeared in Hong Kong and then reappeared in police custody in China, his case fueled anger and concern over Beijing’s reach in the area, later culminating in a wave of anti-government protests that swept the city. shook in 2019. †
Since then, Beijing has acted swiftly to assert control over the former British colony, enacting a sweeping national security law in 2020 that virtually stifles dissension in the city. Last week, Mr Xi made a rare appearance in Hong Kong to mark the 25th anniversary of his transfer of British rule, declaring in a speech that “political power should be in the hands of patriots”.
mr. Xiao was not the only tycoon to find himself in the crosshairs of the government as part of Mr Xi’s anti-corruption campaign. Others include Ye Jianming, an oil magnate who sought connections in Washington, and Wu Xiaohui, whose insurance company bought the Waldorf Astoria Hotel in Manhattan. Lai Xiaomin, the former chairman of a financial firm, was executed last year.
More recently, Mr. Xi has tried to rein in the country’s powerful tech titans, including Jack Ma, the charismatic founder of the e-commerce company Alibaba, who has largely disappeared from public view after criticizing the tech giant in late 2019. banking supervisors.
Hailing from a poor farming village in eastern China, Mr. Xiao was a child prodigy who was admitted to the prestigious Peking University in Beijing at the age of 14. He was chairman of the university’s official student union when pro-democracy protests broke out in Tiananmen Square in 1989. While many of his classmates participated in the turmoil that eventually led to the government’s bloody crackdown, Mr. Xiao loyal to the government. His good reputation later helped him obtain funding from the state-sponsored university for some of his early business ventures.
His wealth grew rapidly, in part because of his success in cultivating relationships with government officials. Many of his business dealings have been obscured by a complex web of fake or bogus companies, which have been used in China to hide officials’ ownership interests. Company records reviewed by DailyExpertNews in 2014 showed that he helped negotiate deals with Mr Xi’s older sister and the son-in-law of Jia Qinglin, a former member of China’s powerful Politburo Standing Committee .
Over time, Mr. Xiao made a fortune of no less than $5.8 billion. At one point, he had interests in more than 30 Chinese financial institutions, including Ping An, one of China’s largest insurers, as well as Harbin Bank, Huaxia Bank and Industrial Bank.
But eventually Tomorrow Group grew so large that it threatened the stability of the Chinese financial system. In 2019, Chinese authorities stepped in to acquire Baoshang Bank, a lender once controlled by Tomorrow Group, after it emerged that the bank was on the brink of bankruptcy. It was the first time in two decades that the government had taken over a bank.
Before his disappearance in 2017, there were signs that Mr. Xiao began to feel the changing political wind. He settled in Canada and acquired Canadian citizenship. He also obtained an Antiguan diplomatic passport. He began working much of his time in Hong Kong, living in a serviced apartment in the Four Seasons and being looked after by a group of female bodyguards.
And when the sister and brother-in-law of Mr. Xi sold their stake in a joint venture with a major Chinese bank in 2013, the buyer was a Chinese company co-founded by Mr. xiao.
Amy Chang Chien reporting contributed.