CHINA’S economic boom in recent decades has created a group of billionaires who amassed wealth at dazzling speed, but who are finding themselves targets in the country’s opaque political and economic system.
Xiao Jianhua, who with his wife ranked 32nd on the Hurun China Rich List 2016 with about US$6bil, is the latest tycoon to be snatched by China’s opaque law enforcement machine. Sources told the South China Morning Post that Xiao is in mainland China assisting with investigations.
Below is a brief introduction to some Chinese tycoons who have experienced such troubles:
Xiao, 46, is the founder of Tomorrow Group, a mainland holding company with business in areas including financial institutions, IT and energy. An investigative report published in April 2013 by New Fortune, a mainland-based financial journal, said Tomorrow Group controls at least nine listed companies as well as 30 financial institutions, including 12 city banks and six brokerage houses, via other entities.
In a rare interview in May 2013 with the 21st Century Business Herald, Xiao denied he committed any crimes while growing his business. Xiao said then that “none of the senior executives at Tomorrow Group has ever been involved in any investigation or questioning by the Chinese authorities”.
The business deals of Xiao, who claims to hold Canadian citizenship, are extensive and opaque. According to a New York Times report published in April 2014, Xiao’s companies helped President Xi Jinping’s relatives dispose of some of their assets after Xi came to power in 2013.
Xiao, who amassed huge wealth, lived at the Four Seasons Hotel in Hong Kong for the past few years but on Jan 27, Lunar New Year’s eve, he left the luxury hotel with a number of people from the Chinese authorities and returned to mainland China.
Guo, the controlling shareholder in Beijing Zenith Holdings and Beijing Pangu Investment, is in self-imposed exile abroad, nearly two years after he told the South China Morning Post he was in New York for treatment of a leg injury, and would return to China soon.
A day before Xiao left the Four Seasons in Hong Kong, Guo conducted an hour-long video interview with the Mirror Group, an overseas Chinese media outlet, in which he alleged that Fu Zhenghua, a Chinese public security vice-minister, had misused his power against Guo.
Guo, a 50-year-old who toppled the Beijing vice-mayor with a sex tape in 2006, said in the interview that his bitter fight against Li You, a former business partner, over the control of Founder Group, a business entity of Peking University, was a proxy war for those behind the scenes.
Guo said he was speaking out to “protect my life, protect my money, and seek revenge”.
Lai, 58, is a former Chinese businessman who is serving a life sentence in China for operating the country’s largest smuggling business in the 1990s.
He was extradited to China in 2011 from a 12-year stay in Canada and was sentenced to life imprisonment the following year. Lai made petitions from prison last month, applying to shift his assets in the custody of Xiamen Customs to the courts, according to documents seen by the Post.
Xu was widely regarded to be China’s No. 1 hedge fund manager with a reputation of chasing stock price gains with gusto.
The 40-year-old, who did not attend college, was one of the most sought-after investment stars in China’s highly speculative stock market. His private investment firm, Zexi Investment, offered the highest return among its peers and managed nearly 20 billion yuan (US$2.9bil) in assets at its peak.
Xu was arrested for insider trading and stock market manipulation in 2015 while on the way to attend his grandmother’s 100th birthday party. He was sentenced to five-and-a-half years’ imprisonment last month in Qingdao. Chinese financial media group Caixin cited unnamed sources as saying Xu was fined 11 billion yuan by the court, setting a record penalty for economic crimes by an individual.
Guo went missing “mysteriously” for three days in December 2015, prompting related listed companies to request trading suspensions in Shanghai and Hong Kong. Guo later said he had been “assisting in certain investigations carried out by mainland judiciary authorities”, although details of these investigations were not made available.
Guo was not found guilty of any crimes, at least publicly.
Xu was a Chinese billionaire businessman associated with disgraced Communist Party “princeling” Bo Xilai. The former founder of the conglomerate Dalian Shide Group was sentenced in 2012 to a four-year prison term for offering Bo and his family 20.6 million yuan in bribes. Xu died of a heart attack in a Hubei prison in 2015 at age 44, two months before his scheduled release.
Xu had an estimated net worth of US$1.05bil (then 8.5 billion yuan) in 2005, which made him the eighth-richest man in the country. — South China Morning Post
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