Xiao Jianhua, Chinese-Canadian billionaire, tried in China

More than five years after his mysterious disappearance from a luxury hotel in Hong Kong, a Chinese-Canadian billionaire and former fin...


More than five years after his mysterious disappearance from a luxury hotel in Hong Kong, a Chinese-Canadian billionaire and former financier trusted by China’s political elite has been tried in a case that epitomizes the ruling Communist Party’s efforts to rein in an earlier era of wheel-and-wheel capitalism free.

Chinese authorities have not released details of the charges against financier Xiao Jianhua. The Canadian Embassy in Beijing said in an emailed statement that it was aware of Monday’s trial and was following the case closely. The embassy added that it provides consular services to Mr. Xiao’s family and will continue to press for consular access, but declined to provide more information out of concern for Mr. Xiao’s privacy. , she said.

There was no immediate indication of how long Mr. Xiao’s trial would last. Chinese courts rarely find defendants not guilty, meaning he will almost certainly be found guilty and sentenced.

The case of Mr. Xiao was widely seen part of the Chinese government’s ongoing campaign to curb the debt-fueled excess that has fueled much of the country’s economic growth in recent decades. In 2020, the Chinese authorities seized nine companies, worth hundreds of billions of dollars, linked to Tomorrow Group. It is the holding company behind Mr. Xiao’s sprawling business empire, which he has built over two decades thanks in part to his high-level political connections.

In taking over two securities companies and a futures company in 2020, China’s 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 the work of risk elimination and defuse financial risks”. The Tomorrow Group conglomerate also had interests in state-dominated industries, including banking, insurance, coal, cement, real estate and rare earth minerals.

Apart from takeover announcements, Chinese authorities have said little about Mr. Xiao’s case. For years there was no official word on his fate following his arrest. ripped off in 2017 from his Four Seasons Hotel apartment in Hong Kong in a wheelchair by half a dozen unidentified men. It was not until 2020 that Tomorrow Group confirmed Mr. Xiao was on the mainland and cooperating with government 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 partly be related to the sensitivity of the information he likely holds. Mr Xiao was well placed to know the secret wealth of China’s top officials, having assiduously courted the political elite, including the family of the country’s current leader, Xi Jinping.

Mr Xiao’s disappearance came amid growing fears of Chinese encroachment on Hong Kong in violation of the “one country, two systems” framework that was supposed to guarantee a high degree of autonomy to the territory as well as the lack of interference from mainland China. Only one year after five Hong Kong booksellers disappeared then reappeared in police custody in China, his case added to anger and anxiety over Beijing’s reach over the territory, which then resulted in the wave of anti-government protests that rocked the city in 2019.

Since then, Beijing has moved quickly to assert its control over the former British colony, enacting a extensive national security law in 2020, this has all but stifled dissent in the city. Last week, Mr. Xi makes a rare appearance in Hong Kong to mark the 25th anniversary of its handover from British rule, proclaiming in a speech that “political power must 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 campaign against corruption. Others include Ye Jianming, an oil tycoon who sought connections in Washingtonand Wu Xiaohui, whose insurance company bought the Waldorf Astoria hotel in Manhattan. Lai Xiaomin, the former chairman of a financial company, was realized Last year.

More recently, Mr. Xi has sought to master the powerful tech titans of the countryincluding Jack Ma, the charismatic founder of e-commerce company Alibaba, who largely disappeared from public view after criticizing banking regulators in late 2019.

Hailing from a poor farming village in eastern China, Mr Xiao was a child prodigy who, at 14, was admitted to the prestigious Peking University in Beijing. He was president of the university’s official student union when pro-democracy protests broke out in Tiananmen Square in 1989. While many of his classmates took part in the unrest that ultimately led to the bloody crackdown on the government, Mr. Xiao remained loyal to the government. His good reputation later helped him secure state-supported university funding for some of his early business ventures.

His wealth grew rapidly, in part due to his success in cultivating relationships with government officials. Much of his business dealings have been obscured by a complex network of shell or dummy companies, which have been used in China to conceal the holdings of public officials. Business records reviewed by The New York Times in 2014 showed he helped broker deals with Mr. Xi’s older sister as well as the son-in-law of Jia Qinglin, a former member of China’s powerful Politburo Standing Committee.

Over time, Mr. Xiao has built a fortune worth $5.8 billion. At one point, he held stakes 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 became so large that it threatened the stability of China’s financial system. In 2019, Chinese authorities stepped in to take over Baoshang Bank, a lender formerly controlled by Tomorrow Group, after it emerged the bank was on the verge of bankruptcy. It was the first time in two decades that the government took control of a bank.

Before his disappearance in 2017, there were signs that Mr. Xiao had begun to sense the shifting political winds. He settled in Canada and obtained Canadian citizenship. He also obtained an Antiguan diplomatic passport. He began spending much of his time working in Hong Kong, where he lived in a serviced apartment at the Four Seasons and was looked after by a coterie of female bodyguards.

And when Mr. Xi’s sister and brother-in-law sold their stake in 2013 in a joint venture with a major Chinese bank, the buyer was a Chinese company co-founded by Mr. Xiao.

Amy Chang Chien contributed report.

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