HONG KONG — Xiao Jianhua, the Chinese Canadian billionaire and financier trusted by China’s ruling elite, was sentenced Friday to 13 years in prison and his company fined $8 billion, after he pleaded guilty guilty of bribery and other crimes that authorities said he had. the financial security of the country is “gravely endangered”.
Mr. Xiao, whose umbrella of Tomorrow Group companies was once worth hundreds of billions of dollars, was also fined $1 million, a Shanghai court said on Friday.
One of several Chinese business tycoons caught in the crosshairs of an anti-corruption crackdown, Mr Xiao was snatched from his home in a luxury hotel in Hong Kong in 2017 and disappeared into Chinese custody. He was not heard from until 2020, when Chinese officials confirmed he was on the mainland and cooperating with the government in restructuring his businesses. Last month, he went on trial again in a Shanghai court, 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 members of the National People’s Congress and members of the Chinese People’s Political Consultative Conference, state media reported on Friday. from China Xiao and his business connections, which reached as high as relatives of China’s top leader Xi Jinping, were once an illustration of the close ties between China’s business world and the political elite.
The Tomorrow Group empire came to symbolize the excesses of China Inc., and its demise in 2020 was a signal to regulators that an era of free finance, in which wealthy executives used their political connections to build big companies who accumulated trophy assets in their home. and abroad, it was over.
The Shanghai First Intermediate Court said on Friday that Mr. Xiao had been convicted of various charges, including illegal embezzlement of public funds, betrayal of the use of entrusted property, and illegal use of funds and bribery. Mr Xiao had “surrendered, admitted guilt and accepted punishment”, it said, adding that he also cooperated to help recover the stolen funds.
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. He had previously said that Chinese authorities had rejected several requests submitted by the embassy to attend Mr. Xiao, who holds Canadian citizenship.
Through Tomorrow Group, Mr. Xiao established financial ties in enterprises that spanned all areas of China’s economy, from banking and insurance to rare metals, coal and real estate. He had financial stakes in some of China’s biggest companies, including insurer Ping An and financial institutions such as Huaxia Bank, Industrial Bank and Harbin Bank.
As his corporate empire grew, Mr. Xiao became wealthy, amassing an estimated net worth of $5.8 billion. The Tomorrow Group eventually became so large that it threatened the country’s financial stability.
An example of his messy financial ties was his stake in Baoshang Bank. Tomorrow Group used the bank to make 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, prompting regulators to take it over.
The following year, regulators also stepped in to dismantle Tomorrow Group, in a move intended to send a strong 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 stocks, real estate holdings and other assets worth $100 million to bribe government officials and evade financial supervision.
“The criminal acts of Tomorrow Groups and Xiao Jianhua seriously damaged the financial management order, seriously endangered national financial security, seriously violated the integrity of state personnel, and should be severely punished according to law “, the court said in its statement. Friday.
Mr. Xiao would eventually be caught up in an anti-corruption campaign waged by the man who took over China in 2012, Mr.
But the two had a prior connection. Mr. Xiao had previously bought shares in an investment firm owned by Mr. Xi’s sister and her husband, according to a New York Times investigation. Then a spokeswoman for Mr. Xiao told The Times that the couple “did it for the family”.
Zixu Wang contributed reporting.