- Xiao Tienan was found guilty of bribing Chinese officials with $100 million of stock, property and cash to evade scrutiny.
- Xiao disappeared from the Four Seasons hotel in Hong Kong in 2017.
- His disappearance raised concerns about Beijing’s growing reach beyond the mainland.
In 2017, Xiao vanished from the Four Seasons hotel in Hong Kong, and it is believed that Chinese security operatives were responsible. Following news that his investment company, Tomorrow Holdings, has connections to the relatives of powerful former officials, analysts of Chinese Communist Party factional intrigue have turned their attention to his case.
The judgement was issued on Friday by Shanghai Number 1 Intermediate People’s Court via its official social media account. Xiao received a prison sentence along with a 6.5 million yuan ($950,000) personal punishment and a 55.03 billion yuan ($8.08 billion) fine for Tomorrow Holding.
According to the judgement, Xiao and his business bribed several authorities with a total of 680 million yuan ($100 million) in stock, real estate, and cash in order to avoid investigation, which “seriously jeopardised national financial security.”
The trial for Xiao, a Canadian citizen, took place behind closed doors in July. At the time, the Canadian Embassy claimed that access to the proceedings had been refused to its representatives.
Concerns about Beijing’s expanding influence outside of the mainland were raised in 2017 after the businessman mysteriously vanished from Hong Kong. Xiao was last seen leaving his opulent hotel in a wheelchair with his head covered, according to Reuters at the time, despite the fact that his legs were in perfect condition.
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Initially, a front-page statement in Xiao’s name was printed in a Hong Kong newspaper, claiming that he hadn’t been kidnapped to the mainland and was instead recovering from a disease abroad. Much later, Chinese authorities acknowledged that he was in their possession.
The operation was described as a “brazen kidnapping” by Jerome Cohen, an expert on Chinese law, who also stated it “was a reminder to all that Hong Kong was no longer a safe haven from the reach of Beijing’s secret police.”
Xiao is one of many corporate magnates who have fallen victim to an anti-corruption drive led by China’s president, Xi Jinping. Wu Xiaohui, the founder of Anbang Insurance Group, was given an 18-year prison term in 2018, and Ye Jianming, the founder of energy behemoth CEFC, is still being held without charge pending trial.
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Because of the political sensitivity of his business relationships with some of the most influential families in the country, there may be further reasons for the secrecy surrounding Xiao’s case. In 2014, the New York Times reported that Xiao helped Xi’s older sister make a deal.
Xiao, a prodigy who was admitted early to China’s prestigious Peking University, was once quoted in the domestic news as saying he planned to create a Chinese version of the multinational investment firm J.P. Morgan. According to the Hurun Report, a list of China’s wealthiest people, his family’s net worth was estimated to be over $5.8 billion in 2016.
In 2020, Xiao’s Tomorrow Holdings’ nine related companies were taken under the authority of Chinese regulators. The Xiao trial was only one of many cautionary tales for China’s business community ahead of the crucial Chinese Communist Party Congress in the fall, where Xi is anticipated to break with tradition and win a third term. Following a year-long investigation, China’s cybersecurity authority penalised ride-hailing giant Didi Global $1.2 billion for breaking data security laws last month.
Business magazine Caixin claimed last month that Tsinghua Unigroup’s Zhao Weiguo, a semiconductor tycoon, had been seized from his house and placed under investigation.
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