Tycoon Xiao Jianhua’s return to mainland a political power play, analysts say

The investigation that netted a mainland billionaire who took sanctuary in Hong Kong likely stems from Beijing’s desire to ensure a smooth leadership transition in a politically sensitive year, sources and analysts said.

The curious circumstances surrounding how Xiao Jianhua, a well-connected mainland tycoon, vanished from a Hong Kong luxury hotel on the eve of the Lunar New Year has sparked speculation.

Hong Kong police later confirmed that Xiao returned to the mainland legally through border checkpoints. Sources said Xiao was now assisting the authorities in investigations, including ones covering bribery and stock market manipulation.

Analysts and people familiar with the matter said the timing of the investigation showed that Beijing was trying to avoid any surprises ahead of a key party congress later this year, and was stepping up control of tycoons like Xiao who could reveal inside deals or cause market swings. At the same time, the questioning of Xiao, who reportedly did business with family members of China’s state leaders, would send a signal that Beijing would not tolerate businessmen who pursued fishy deals by involving well-connected partners, analysts said.

Zhuang Deshui, a specialist on corruption at Peking University, said private businessmen were not prime targets of the anti-graft crackdown, which focused on party members.