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Xiao Jianhua
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In Hong Kong, residents are worried about Beijing’s attempts to tighten its grip on the city, while central government officials are more concerned with losing control, says Wang Xiangwei.

  • Canadian-Chinese tycoon guilty of illegally collecting public deposits, using entrusted assets in breach of trust, illegal use of funds and bribery, a Shanghai court says
  • Sentencing concludes a clean-up of Xiao’s financial empire, which was part of Beijing’s efforts to control financial risks
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‘The whip didn’t really hit the right places,’ state media says as small-bank shareholders have been allowed to amass stakes in the banks without regulatory approval, while also using the lenders to secure loans.

Baoshang was taken over by the government in May 2019, part of an onerous process by the financial and banking regulators to clean it up, recapitalise and resuscitate it to avoid a whole scale collapse in China’s financial system.

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Tomorrow Group, founded by vanished oligarch Xiao Jianhua, illegally took US$22.3 billion of loans from Baoshang Bank over the course of 14 years, but did not repay them.

Still, coming in the wake of the takeovers by China’s financial regulators of several insurers, financial trusts and brokers linked to Xiao and the Tomorrow Group, the statement raised questions about the way by which the Chinese authorities are going about in taking down one of the country’s most powerful oligarchs.

Five out of the six firms are linked to Tomorrow Group, the investment vehicle of tycoon Xiao Jinhua, as the extension of the regulator’s effort to break up his empire. The latest seizures come more than a year after taking his flagship banks that had engaged in errant lending.

It’s also the second of several banks in Xiao’s financial empire to be put under state ward, after the May 24 nationalisation of Baoshang Bank in Inner Mongolia’s Baotou city.

Wen Yingjie, a top aide to Chinese tycoon Xiao Jianhua, was set free without trial in June after years under investigation, according to three independent sources.

People’s Bank of China says an investment conglomerate led by financier Xiao Jianhua misappropriated bank funds, triggering credit risks and prompting the government to step in.

Baoshang Bank’s case reflects credit risks hidden in China’s small and medium lenders and more of these issues will surface as regulations are tightened

Baoshang is a key piece in Xiao’s business empire, which holds stakes in hundreds of Chinese listed companies via proxies, spanning energy, financial services, technology and real estate, among a myriad of industries.

The trial of Xiao Jianhua, the Chinese billionaire who vanished from a luxury Hong Kong hotel in 2017, won’t take place in China until the second half of this year as his former flagship company struggles to dispose of assets.

United States Department of State report referred to disappearance of tycoon Xiao Jianhua from Hong Kong hotel in January 2017 and the jailing of three student Occupy leaders including Joshua Wong