Chinese tycoon Xiao Jianhua, missing since 2017, sentenced to 13 years

Xiao Jianhua poses in a park in a picture before his disappearance in 2017 / afp

Tried behind closed doors in Shanghai for paying bribes and diverting funds, the absence of the businessman became a mystery, although the judicial process confirms that he has been in the hands of the regime all this time

After spending five years missing and being tried behind closed doors, tycoon Xiao Jianhua, one of the richest in China, has been sentenced to 13 years in prison and his company, the Tomorrow Group, fined a record fine of 55,000 million yuan (8,025 million euros). After a dark judicial process in which the charges had not come to light, the Shanghai First Intermediate Court has found him guilty of having illegally appropriated his company’s funds and paying bribes.

“The criminal acts of Xiao Jianhua and the Tomorrow Group seriously damaged the order of financial management, putting national economic security at risk and violating the professional integrity of public officials,” the sentence concludes, according to the newspaper ‘South China Morning Post’. In addition to sanctioning his company, the judges have imposed a personal fine of 6.5 million yuan (947,000 euros) on the tycoon.

Under the ruling, Xiao and the Tomorrow Group diverted funds and assets from a bank they controlled, Baoshang, worth 148.6 billion yuan (21.683 million euros) from 2004 to 2018. Finally, said bank was intervened by the Government in May 2019, after it went bankrupt. Similarly, in July 2020, Chinese regulators expropriated another nine companies from the Tomorrow Group, including insurance companies and stock brokerage firms.

In addition to this embezzlement, the ruling states that Xiao Jianhua and his company gave government officials bribes worth 680 million yuan (99 million euros) to avoid tax inspections between 2001 and 2021. Interestingly, that includes the last four years in which the tycoon was missing and, supposedly, detained by the Chinese authorities in some secret place.

From finance to mining

Born 50 years ago to a poor rural family in the province of Shandong, Xiao Jianhua became one of the richest men in China by amassing 5.5 billion euros with his industrial group Tomorrow, which brought together everything from finance to insurance to real estate and mining.

But his star went out with the ‘crash’ that shook the Chinese stock market in the summer of 2015, when shares worth 4.6 billion euros were volatilized and millions of small investors lost their life savings. What until then had been his main asset, his businesses with high-ranking families of the regime, then became a dangerous political weapon.

While other tycoons and stock market regulators were purged by the disaster, Xiao Jianhua took refuge in Hong Kong, where he lived in an apartment at the luxurious Four Seasons hotel protected by an Amazonian guard of female bodyguards. She was last seen there on January 27, 2017, when at three in the morning she got into a car with two of his bodyguards that picked them up at the gates of their hotel. The next day, his wife reported his disappearance to the police, but later withdrew it.

Although his whereabouts have since been a mystery, it was clear that he was in the hands of the regime. As reported by the newspaper ‘South China Morning Post’, he was convinced by the authorities to cross into mainland China and “help” in two investigations: one on the stock market ‘crack’ and another on corruption among senior Party officials. Communist.

Something that Xiao Jianhua could know a lot about because, according to Caijing magazine, he was a partner of Vice President Zeng Qinghong’s son in the controversial acquisition of the state-owned company Shandong Luneng. With a market value of 73,800 million yuan (10,800 million euros), both bought the company for only 3,730 million (546 million euros), but a spokesman for Xiao Jianhua assured in 2014 that the operation had been completely legal, collects the newspaper.

That same year, ‘The New York Times’ also reported that the tycoon had done business with the sister and brother-in-law of Chinese President Xi Jinping. Responding to the article, his business group acknowledged that he had bought a block of shares from them in 2013.

In early July, it became known that he was being tried, but not the crimes for which he had been prosecuted. Held behind closed doors, the oral hearing was not even attended by diplomats from the Embassy of Canada, a country for which Xiao Jianhua has a passport along with another from China and an official one from Antigua and Barbuda. Neither his passports nor his millions nor his alleged contacts with his power have saved him from the sentence, which has been reduced by his collaboration to “repair the damage.”