Xiao Jianhua – a Chinese-Canadian billionaire who disappeared from Hong Kong five years ago, amid suspicions he had been taken into state custody – is set to face trial in China.
The Canadian Embassy in Beijing, which revealed the news about Xiao, said they would closely monitor the case.
“Global Affairs Canada, our home office, is aware that a trial in the case of Canadian citizen Mr Xiao Jianhua will take place today,” a Canadian Embassy official said over the phone in a readout of a statement from Ottawa.
“Canadian consular officials are monitoring this case closely, providing consular services to his family and continue to press for consular access.”
Regulatory Crackdown
Xiao’s investment conglomerate Tomorrow Holdings fell foul of a regulatory crackdown on financial holding companies in 2017.
Xiao had reportedly aspired to create a Chinese equivalent of JP Morgan. From 1998 to when he was arrested in 2017, he and his wife created the “Tomorrow Empire” consisting of six listed companies, six commercial banks, six security brokerages and several more financial institutions.
In late 2020, Xiao was linked to the collapse of the Baoshang Bank, which was said to have served as an “ATM” for the billionaire and the Tomorrow Holdings conglomerate. The bank started bankruptcy proceedings after regulators took control of the Inner Mongolian lender in May 2019 because of its serious credit risks.
China-born Xiao, who was known to have links to the Communist Party elite, has not been seen in public since 2017 after he was investigated in a state-led crackdown on the Tomorrow group. The specifics of the probe haven’t been disclosed by officials.
Xiao was ranked 32nd on the 2016 Hurun China rich list, China’s equivalent of the Forbes list, with an estimated net worth of $5.97 billion at the time.
But in July 2020, nine of the group’s related institutions were seized by Chinese regulators as part of a crackdown on risks posed by financial conglomerates.
In 2021, regulators extended the one-year take-over period of the nine financial enterprises by another year to “further promote risk disposal work and defuse financial risks.”
The extended custody is set to end on July 16.
The seizures were preceded by a takeover of Baoshang Bank in May 2019, a lender once controlled by Tomorrow, by regulators, citing severe credit risks.
The lender, which had operated nationwide, was revamped into a much smaller lender back in its home region of Inner Mongolia in northern China.
Corruption Probes
In recent years, a number of executives at big Chinese companies have been subject to investigation or prosecution amid a broader crackdown on corruption spearheaded by President Xi Jinping that has also ensnared politicians and bankers.
Among those who have fallen from grace was Jiang Jiemin, former head of China National Petroleum Corp, who was sentenced to 16 years for bribery and abuse of power in 2015.
In 2017, Ai Baojun, a former chairman of Baoshan Iron and Steel who had gone on to become vice mayor of Shanghai, was sentenced to 17 years in jail for bribery and graft.
- Reuters with additional editing by Jim Pollard
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