HONG KONG — Xiao Jianhua, a Chinese-Canadian billionaire and once-trusted investor in China’s ruling elite, was sentenced to 13 years in prison on Friday and his company is being held by authorities. was fined $8 billion after pleading guilty to bribery and other crimes he said. It seriously endangered the financial security of the country.
Xiao, who was once worth hundreds of billions of dollars under a company owned by Tomorrow Group, was also fined $1 million, a Shanghai court said Friday.
Xiao, one of several Chinese businessmen targeted in a corruption crackdown, was snatched from his luxury Hong Kong hotel home and detained by Chinese nationals in 2017. There was no news of him until 2020, when Chinese officials confirmed he was in the mainland and cooperating with the government in restructuring the business. He showed up, but authorities kept the details of the charges against him secret.
His trial, which began on July 4, was attended by senior Chinese officials, including delegates to the National People’s Congress and members of the Chinese People’s Political Consultative Council, Chinese state media reported Friday. Xiao and his business ties have extended to the family of China’s supreme leader, President Xi Jinping.
The Tomorrow Group empire has come to symbolize China Inc.’s excesses. And its demise in 2020 signaled the arrival of an era of freewheeling finance in which wealthy executives used their political ties to build giant corporations and scoop up trophy wealth from their homes, regulators said. there were. And overseas, it’s over.
The Shanghai First Intermediate Court said on Friday that Xiao was found guilty of multiple charges, including illegally expropriating public funds, betraying the use of entrusted property, and illegally using funds and bribery. Xiao said he “turned himself in, admitted guilt and accepted punishment,” adding that he also helped recover stolen funds.
Tomorrow Group did not respond to a request for comment, and Xiao did not immediately respond to a request for comment through an intermediary. He reached out to the Canadian embassy in Beijing for comment, but so far has not received a response. Chinese authorities have rejected several requests submitted by the embassy to attend the trial of Shao, who has Canadian citizenship.
With Tomorrow Group, Xiao has established financial relationships with companies across all sectors of the Chinese economy, from banking and insurance to rare metals, coal and real estate. He financed some of China’s biggest companies, including insurance company Ping An and financial institutions such as Huaxia Bank, Industrial Bank, and Harbin Bank.
As his corporate empire grew, Mr. Xiao became wealthy, accumulating an estimated net worth of $5.8 billion.Tomorrow’s group eventually grew so large that it threatened the country’s financial stability.
One example of that thorny financial relationship was a stake in Baosho Bank. The Tomorrow Group used this bank to make loans to other Tomorrow Group companies, but these loans were off the books for years. Then, in 2019, the bank was pushed to the brink of bankruptcy and was taken over by regulators.
The following year, regulators also embarked on dismantling the Tomorrow Group. The move was meant to send a strong message to China’s corporate sector to curb excessive borrowing.
A court on Friday found that between 2001 and 2021, Xiao and Tomorrow Group used $100 million worth of stocks, real estate holdings and other assets to bribe government officials to evade financial oversight. said he did
In a statement, the court said, “Tomorrow Group and Xiao Jianghua’s criminal acts have seriously damaged the financial management order, seriously endangered the national financial security, and seriously violated the dignity of state officials. and should be severely punished according to the law.” On Friday.
Xiao would eventually become embroiled in the anti-corruption campaign of Xi Jinping, who ruled China in 2012.
However, the two had a long-standing relationship. Mr. Xiao had previously purchased shares in an investment firm owned by Mr. Xi’s sister and her husband, according to a New York Times investigation. A spokesperson for Mr. Xiao told The Times at the time that the couple “did it for their family.”
Zixu Wang contributed to the report.