HONG KONG – Xiao Jianhua, a Canadian-Chinese billionaire and trusted financier of China’s ruling elite, was sentenced to 13 years in prison on Friday and fined $8 billion for his company, after pleading guilty to bribery and other crimes that authorities said he committed. It “seriously jeopardizes” the country’s financial security.
A court in Shanghai said on Friday that Xiao, whose umbrella group Tomorrow Group was previously worth hundreds of billions of dollars, was also fined $1 million.
Mr. Xiao was one of the many Chinese business tycoons who fell into the clutches of the anti-corruption campaign to kidnap From his home in a luxury hotel in Hong Kong in 2017, he disappeared into China custody. There was no news of him until 2020, when Chinese officials confirmed that he is on the mainland and is cooperating with the government in restructuring his business. Last monthHe reappeared to appear before a court in Shanghai, but the authorities kept the details of the charges against him a secret.
Chinese state media reported on Friday that his trial, which began on July 4, was attended by senior Chinese officials, including deputies to the National People’s Congress and members of the Chinese People’s Political Consultative Conference. Mr. Xiao and his business ties – which reached the level of family members of China’s supreme leader, Xi Jinping – were once an example of the close ties between the Chinese business world and the political elite.
The Tomorrow Group’s empire came to symbolize the excesses of China Inc. demise in 2020 It was a signal from regulators that the era of freelance finance was over, as wealthy executives used their political connections to build huge corporations that amassed memorable assets at home and abroad.
The Shanghai Intermediate Court of First Instance said on Friday that Mr. Xiao was found guilty of several charges, including illegal assimilation of public funds, treason using entrusted property, illegal use of funds and bribery. Mr. Xiao “has surrendered, pleaded guilty and accepted the punishment,” she added, adding that he had also cooperated in helping to recover the stolen money.
Tomorrow Group did not respond to a request for comment, and Mr. Xiao did not immediately respond to a request for comment through an intermediary. The Canadian Embassy in Beijing did not immediately respond to requests for comment. It had previously said that the Chinese authorities had rejected several requests made by the embassy to attend the trial of Mr. Xiao, who holds Canadian citizenship.
Using the Tomorrow Group, Mr. Xiao has built financial relationships in companies that spanned all areas of the Chinese economy, from banking and insurance to rare earths, coal and real estate. It had financial stakes in some of the largest companies in China, including the insurance company Ping An and financial institutions such as Huaxia Bank, Industrial Bank and Harbin Bank.
As his company empire grew, Mr. Xiao became wealthy, amassing an estimated $5.8 billion in net worth. Tomorrow’s group eventually became so large that it threatened the country’s financial stability.
One example of her chaotic financial relationships is her stake in Baoshang Bank. Tomorrow Group used the bank to provide loans to other Tomorrow Group companies, but kept those loans off the books for years. Then in 2019, the bank was pushed to the brink of bankruptcy, leading regulators to take it over.
The following year, regulators also intervened to break up Tomorrow Group, in a move aimed at sending a powerful message to China’s corporate sector to curb excessive borrowing.
The court said on Friday that between 2001 and 2021, Mr. Xiao and Tomorrow Group used $100 million worth of stocks, real estate and other assets to bribe government officials and evade financial oversight.
“The criminal acts of Tomorrow’s groups and Xiao Jianhua have severely damaged the financial management order, seriously endangered national financial security, and seriously violated the integrity of state employees, and they should be severely punished in accordance with the law,” the court said in its statement. Friday.
Mr. Xiao would eventually become embroiled in an anti-corruption campaign launched by the man who took charge of China in 2012, Mr. Xi.
But the two had prior contact. Mr. Xiao had previously bought shares in an investment company owned by Mr. Shi’s sister and her husband, according to Mr. New York Times investigation. At the time, a spokeswoman for Mr. Xiao told The Times that the couple “did it for the family.”
zixu wang Contribute to the preparation of reports.
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