'Missing' tycoon under probe over stock crash

 Chinese billionaire Xiao Jianhua, founder of Beijing-based Tomorrow Group, attending a robotics symposium at the Chinese University of Hong Kong.
Chinese billionaire Xiao Jianhua, founder of Beijing-based Tomorrow Group, attending a robotics symposium at the Chinese University of Hong Kong. PHOTO: AFP

Canadian national who vanished from HK is in China helping investigators: Report

HONG KONG • A billionaire who went missing from Hong Kong is reportedly under investigation in connection with China's 2015 stock crash.

Local media say financier Xiao Jianhua was last seen at his apartment in Hong Kong's harbour-facing Four Seasons Hotel.

The 46-year-old was taken across the border by Chinese security agents last week, according to overseas Chinese language media.

It is illegal for Chinese agents to operate in Hong Kong and the case has sparked new fears that Hong Kong's freedoms are under threat from Beijing.

Three statements purportedly from Mr Xiao - a Canadian citizen - denying he has been kidnapped have appeared on his company's WeChat account and on the front page of a Hong Kong newspaper.

The Canadian consulate said its officials were in contact with the authorities to "gather additional information and provide assistance".

According to the South China Morning Post (SCMP), Mr Xiao, founder of Beijing-based Tomorrow Group, is in China and "assisting investigations" into the stock market turmoil of 2015. The Shanghai stock index tumbled nearly 40 per cent in just two months after peaking in June that year.

It is unclear how Mr Xiao is being linked to the crash, but Chinese investigators have targeted several investment executives on suspicion of insider trading since the stock rout.

Last week, former star hedge fund manager Xu Xiang was sentenced to more than five years in prison for market manipulation.

Apple Daily reported yesterday that Xu had been a neighbour of Mr Xiao's at the Four Seasons before Xu was detained in China.

The investigation into Mr Xiao is also linked to China's disgraced former spymaster Ma Jian, SCMP said. Ma was deputy head of China's Ministry of State Security and was expelled from the ruling Communist Party last December on suspicion of taking bribes and "abusing power".

There has been widespread speculation that Mr Xiao's disappearance was part of Chinese President Xi Jinping's ongoing anti-corruption drive, which some critics believe has been used to target his political opponents.

One US-based China-watcher said he believed Mr Xiao was being targeted by Mr Xi "to use him as a source to extract information on his enemies".

Another source, who said he had met Mr Xiao, described him as a "powerful deal broker" for China's princelings. "He's low-key, but he's very high-flying among Chinese bankers in Hong Kong," he told Agence France-Presse.

Hong Kong news site Initium reported that Mr Xiao had wanted to move some of his companies to Japan as he no longer felt secure in Hong Kong. He had also been seeking business partnerships in Taiwan. Citing people familiar with him, Taiwan's Business Today magazine reported in 2009 that he was courting connections there because he felt it was the safest place to flee.

SCMP, quoting a source, said Mr Xiao's wife, Ms Zhou Hongwen, now helms their business empire.

Mr Xiao's case has echoes of the 2015 disappearance of five booksellers known for publishing salacious titles about Beijing's leadership. One of the men, Mr Lee Bo, a British citizen, vanished from Hong Kong, triggering international condemnation and local protests.

All five booksellers resurfaced in China. All except one have since returned to Hong Kong.

AGENCE FRANCE-PRESSE

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A version of this article appeared in the print edition of The Straits Times on February 03, 2017, with the headline ''Missing' tycoon under probe over stock crash'. Print Edition | Subscribe