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China sentences tycoon Xiao Jianhua to 13 years in prison and pays his company $8.1 billion in fines

China sentences tycoon Xiao Jianhua to 13 years in prison and pays his company $8.1 billion in fines
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People walk past the building with the listed address of Tomorrow Holdings Beijing office, China February 3, 2017. REUTERS/Thomas Peter

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BEIJING, Aug 19 (Reuters) – A court in Shanghai on Friday sentenced Chinese-Canadian billionaire Xiao Jianhua, who has not been seen in public since 2017, to 13 years in prison and his conglomerate Tomorrow Holdings a fine of 55.03 billion yuan ($8.1 billion), a record in China.

Xiao and Tomorrow Holdings have been charged with illegally siphoning off public funds, revealing the use of entrusted property and committing illegal use of funds and bribery, the Shanghai First Intermediate Court said.

It added that the sentence was reduced because both admitted their crimes and cooperated in recovering illegal gains and recovering losses.

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Chinese-born Xiao, who is known to have ties to the Chinese Communist Party’s elite, was last seen being abducted from a luxury hotel in Hong Kong in the early hours of the morning, his head covered, in a wheelchair, a source said in close to the tycoon told Reuters at the time.

Xiao and Tomorrow have “seriously violated a financial management order” and “violated the state’s financial security,” the court said, with the tycoon additionally fined 6.5 million yuan for the crimes.

From 2001 to 2021, Xiao and Tomorrow gave government officials stocks, real estate, cash and other assets totaling more than 680 million yuan to evade financial supervision and gain ill-gotten gains, according to the court.

In July 2020, nine of the group’s affiliated institutions were seized by Chinese regulators as part of a crackdown on risks posed by financial conglomerates. Continue reading

Among the nine firms were four insurers — Tianan Property Insurance Co of China, Huaxia Life Insurance Co, Tianan Life Insurance Co and Yi’an P&C Insurance Co — as well as New Times Trust Co and New China Trust Co. The other three were Chengtong Securities , Guosheng Securities and Guosheng Futures.

The court explained that since 2004, Xiao and Tomorrow controlled several financial institutions and Internet financial platforms, including the failed Baoshang Bank, through multiple levels of indirect shareholders and anonymous ownership.

Xiao was said to have used the illicit profits to acquire financial institutions, securities trading and overseas investments. But it acknowledged his attempts at reparation.

“Xiao Jianhua has taken commendable measures, so according to the law, he was given a lighter sentence,” it said.

Asked about Xiao’s right to consular access as a Canadian citizen at a briefing on Friday, Chinese Foreign Ministry spokesman Wang Wenbin said Xiao is not entitled to such rights because Chinese law does not recognize dual citizenship.

Canada’s Foreign Ministry said it was aware of media reports of the conviction and its officials were monitoring the case and urging consular access.

“The lack of transparency in Mr. Xiao’s judicial process is of great concern, as is the continued lack of consular access, which prevents us from assessing his well-being,” the statement said.

Tomorrow Holdings could not be immediately reached for comment.

($1=6.8056 Chinese Renminbi Yuan)

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Reporting by Tony Munroe, Ziyi Tang, Ryan Woo, Ellen Zhang, Eduardo Baptista, and Meg Shen; Editing by Stephen Coates and Clarence Fernandez

Our standards: The Thomson Reuters Trust Principles.

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