Missing Chinese Billionaire Agreed to Be Taken Away, Source Says

Anti-corruption team held discussions with Xiao Jianhua before he consented to leaving Hong Kong with them
By Li Lingpu
Li Lingpu
Li Lingpu
May 17, 2017 Updated: May 17, 2017

HONG KONG—Xiao Jianhua, the Chinese billionaire whose abrupt disappearance from Hong Kong in January made waves internationally, had engaged in a week-and-half long negotiation with Chinese anti-corruption agents before he agreed to return to Beijing with them, according to a source with knowledge of the matter.

The source, who is close to high-level discussions in the Chinese leadership headquarters at Zhongnanhai, also told The Epoch Times that the anti-corruption team is still in Hong Kong investigating other corrupt Chinese businessmen and officials residing in the semiautonomous city.

Xiao, a 45-year-old China-born Canadian citizen, suddenly went missing from his serviced apartment in Hong Kong’s Four Seasons Hotel on Jan. 27. Accounts in Hong Kong and Western press suggested that Xiao, who controls the holding company Tomorrow Group, was effectively abducted by the Chinese authorities and spirited back to mainland China.

But Xiao had consented to be brought in by the authorities, according to the source in Zhongnanhai. The source said that Xiao and anti-corruption teams based in the Four Seasons discussed the conditions of the engagement for over a week before Xiao finally agreed to leave with them. While details of what transpired are scarce, it is likely that some level of coercion was involved, given mainland authorities presumably continue to enjoy leverage over Xiao, his wealth, and his family members.

Xiao is wanted by the administration of Chinese leader Xi Jinping to assist investigations of corrupt Chinese businessmen and high-ranking officials, according to an earlier report by The Epoch Times. Xiao is known to handle to financial transactions for other Party elites and their kin through his various shell companies, and is also the most important money launderer for the political faction of former Communist Party leader Jiang Zemin.

Jiang and his faction have overseen the spread of corruption, kleptocracy, and persecution in China for nearly two decades. But in the past five years, Xi has been using an anti-corruption campaign to rectify the Party of Jiang’s influence, and consolidate his position.

The disappearing and investigation of Xiao Jianhua appears to be part of Xi’s efforts to take down Jiang’s faction, which has continually resisted the anti-corruption campaign and sought to undermine the Xi leadership. Xi has recently stepped up efforts to purge Hong Kong and the Chinese financial sector of corrupt elements, many of whom are likely to also be linked with Jiang.

According to the source in Zhongnanhai, the Chinese anti-corruption elements that were in contact with Xiao comprised two teams of over twenty officials from the Party’s anti-corruption agency, state intelligence and public security personnel, as well as legal officials from the Chinese regime’s two highest legal apparatus, the Supreme People’s Court and the Supreme People’s Procuratorate.

The two teams had embedded themselves in Four Seasons for over three months to carry out investigations before they held talks with Xiao, the sources said. The teams became Xiao’s neighbors by renting several residential units next to his.

The anti-corruption teams are still stationed in Four Seasons, and are presently investigating other corrupt Chinese officials and businessmen in the premises, the source added. Since Xiao’s case, however, some of these corrupt elements have moved to other Hong Kong luxury hotels, including Shangri-la, the Ritz Carlton, and serviced apartments in the commercial Wan Chai district.   

Well-connected Chinese businessmen like Xiao Jianhua chose to take up residence in Four Seasons Hotel due to numerous factors, according to a Hong Kong financial industry veteran who spoke to this newspaper on condition of anonymity.

The Four Seasons is located in Central, the central business district of Hong Kong, and that makes it a convenient spot for businessmen to meet and network, the finance veteran said.

The Four Seasons also offers its residents confidentiality protection that is at the level of Swiss banks, the financier added. Security is tight and strangers are barred from entering the premises, which offers another layer of protection.

“Most crucially, [Four Seasons] won’t divulge information to the government, which makes any investigation difficult,” the financier said. “In contrast, one can easily be abducted in the dead of the night if one lives in private mansions or in Mid-Levels,” an affluent residential area in Hong Kong Island.

Li Lingpu