More than five years after his unexplained disappearance from a luxury hotel in Hong Kong, a Chinese Canadian billionaire and onetime trusted financier to China’s political elite has been put on trial in a case that epitomises the ruling Communist Party’s efforts to rein in an earlier era of freewheeling capitalism. The trial is taking place in a case that epitomises the ruling Communist Party’s efforts to rein in an earlier era of freewheeling capitalism.
Xiao Jianhua, a financier, is being investigated by the Chinese government; however, specifics of the allegations against him have not been made public. The Canadian embassy in Beijing sent a statement through email stating that the Chinese authorities had denied repeated requests made by the embassy to attend Monday’s hearing. The requests were filed to the Chinese authorities. The embassy stated that it was providing consular services to Mr. Xiao’s family and would continue to press for consular access; however, it declined to provide any additional information out of concern for Mr. Xiao and his family’s privacy.
There was no indication available right away as to how long the trial of Mr. Xiao would last. It is quite unusual for Chinese courts to find defendants not guilty, which means that he will almost probably be convicted and jailed for his crime.
Many people believe that the case against Mr. Xiao is part of an ongoing effort by the Chinese government to rein in the debt-fueled excess that has been the primary driver of most of the country’s economic expansion over the last several decades. In the year 2020, the Chinese government took control of nine enterprises that were connected to Tomorrow Group and were together valued hundreds of billions of dollars. That is the holding firm that is behind Mr. Xiao’s vast business empire, which he created over the course of twenty years in part because to his high-level political contacts. His corporate empire spans a wide range of industries.
When China’s securities regulator seized control of two securities firms and a futures company in 2020, it accused the companies of giving deceptive information about their owners and controllers, which led to the regulator taking control of the companies. The authorities decided to keep the nine businesses under seizure for an additional year in July of 2021, citing the need to “further boost risk disposal efforts and defuse financial threats.” The conglomerate known as Tomorrow Group also has holdings in state-controlled businesses including banking, insurance, coal, cement, real estate, and rare-earth minerals.
Aside from the declarations of the takeovers, the Chinese authorities have not provided much other information regarding Mr. Xiao’s situation. After he was abducted in 2017 from his residence at the Four Seasons Hotel in Hong Kong while he was in a wheelchair, there was no official news regarding his whereabouts for several years. In 2017, he was taken from his apartment at the Four Seasons Hotel. The confirmation that Mr. Xiao was present on the mainland and assisting the government in its attempts to rebuild the conglomerate was not provided by Tomorrow Group until the year 2020.
It is possible that the sensitive nature of the information that Mr. Xiao most likely has is one of the factors contributing to the opacity surrounding his case. Mr. Xiao was in a good position to know about the hidden riches of China’s top officials since he had diligently courted the political elite, including the family of the current leader of the nation, Xi Jinping. As a result, Mr. Xiao had access to this information.
The disappearance of Mr. Xiao took place at a time when fears were growing about Chinese encroachment into Hong Kong in violation of the “one country, two systems” framework. This framework was intended to guarantee a high degree of autonomy to the territory as well as freedom from mainland Chinese interference. However, the framework was violated when Chinese encroachment into Hong Kong took place.
But finally, Tomorrow Group grew to such a size that it posed a risk to the reliability of China’s monetary system. Baoshang Bank, a lender that was formerly managed by Tomorrow Group, was taken over by the Chinese government in 2019 when it became apparent that the bank was on the verge of failing to meet its financial obligations. It had been twenty years since the last time the government had seized control of a financial institution.
In the years leading up to his disappearance in 2017, there were indications that Mr. Xiao had started to pick up on the shifting political currents. He moved his family to Canada and eventually became a citizen of that country. In addition to that, he was issued a diplomatic passport from Antigua. He started devoting a significant portion of his time to working in Hong Kong, where he resided in a serviced apartment at the Four Seasons and was attended to by an entourage of female bodyguards. He was very wealthy.
And when Mr. Xi’s sister and brother-in-law decided to sell their investment in a joint venture with a large Chinese bank in 2013, the buyer was a Chinese business that Mr. Xiao had co-founded. The transaction took place in China.