A court in Shanghai sentenced Chinese-born Canadian billionaire Xiao Jianhua on Friday to 13 years in prison after finding him guilty of bribery, illegal use of funds and other financial crimes in a case that has touched upon the highest rungs of Chinese political power.
Shanghai Number 1 Intermediate People’s Court announced the verdict on Friday on its official social media account. As well as the prison sentence for Xiao, it included a personal fine of 6.5 million yuan ($950,000), while Tomorrow Holding was fined 55.03 billion yuan ($8.08 billion).
The ruling stated that Xiao and his company had “done severe damage to orderly financial oversight and severely endangered national financial security” by bribing numerous officials with a total of 680 million yuan ($100 million) of stock, property and cash to evade scrutiny.
Xiao, who holds a Canadian passport, was tried in a closed-door hearing in July. The Canadian Embassy said at the time that its representatives were denied access to the proceedings.
The businessman’s dramatic disappearance from Hong Kong in 2017 raised concerns about Beijing’s growing reach beyond the mainland. Reuters reported at the time that Xiao was last seen being whisked from his luxury hotel in a wheelchair with his head covered, despite nothing wrong with his legs.
At first, a front-page statement was published in a Hong Kong newspaper in Xiao’s name, saying he hadn’t been abducted to the mainland and was recovering from an illness overseas. Chinese authorities confirmed much later that he was in their custody.
Jerome Cohen, an expert on China’s legal system, called the operation a “brazen kidnapping” and said it “was a warning to all that Hong Kong was no longer a safe haven from the reach of Beijing’s secret police.”
Xiao is one of a string of business tycoons who have met their downfalls in an anti-corruption campaign launched by China’s leader, Xi Jinping. Anbang Insurance Group founder Wu Xiaohui was sentenced to 18 years in prison in 2018, and Ye Jianming, founder of energy conglomerate CEFC, remains under detention awaiting trial.
The secrecy surrounding Xiao’s case may also have to do with the political sensitivities of his business dealings with some of the nation’s most powerful families. The New York Times reported in 2014 that Xiao facilitated a deal for Xi’s elder sister.
Described in the domestic press as a prodigy who tested in early to China’s elite Peking University, Xiao once said he wanted to build a Chinese equivalent of investment banking giant J.P. Morgan. His family wealth was estimated at around $5.8 billion in 2016 by the Hurun Report, a ranking of China’s wealthy.
Chinese regulators seized control of nine firms affiliated with Xiao’s Tomorrow Holdings in 2020.
Xiao’s trial was one of several warnings for China’s business sector, ahead of a critical Chinese Communist Party Congress in the autumn, where Xi is expected to break precedent by staying on for a third term. Last month, China’s cybersecurity regulator fined ride-hailing juggernaut Didi Global $1.2 billion for violating data security laws after a year-long probe.
A semiconductor tycoon, Tsinghua Unigroup’s Zhao Weiguo, was reported last month by business publication Caixin to have been taken from his home and put under investigation.