Financier Xiao Jianhua has shed his holdings in more than 10 banks, Chinese regulator says, offering a rare peek of a state-ordered break-up

Tomorrow Group, controlled by Chinese financier Xiao Jianhua, has transferred its holdings in more than 10 financial institutions including the Bank of Weifang and Taian Bank in Shandong province, and Zhongjiang Trust in Jiangxi province, according to a statement by the bank regulator

Harbin Bank, where Tomorrow Group also owns shares, is operating normally, the regulator said

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An advertisement of Baoshang Bank in Beijing on September 8, 2018. Photo: Reuters

Published: 4:43pm, 9 Jun 2019Updated: 11:46pm, 9 Jun 2019

Tomorrow Group, the conglomerate founded by Chinese financier Xiao Jianhua, has transferred its holdings in more than 10 financial institutions to new shareholders, part of a slimming exercise ordered by the government to pare debt, according to the bank regulator.

The company, based in Inner Mongolia’s Baotou city, has shed its stakes in more than 10 entities including Bank of Weifang and Taian in Shandong province, and Zhongjiang Trust in Jiangxi province, the China Banking and Regulatory Commission (CBIRC) said. Hong Kong-listed Harbin Bank, where Tomorrow Group also owns shares, is operating normally and has disclosed its financial results, the regulator said.

“Under efforts by all parties, Tomorrow Group has adjusted its structure, slimmed down and transformed,” the CBIRC said in its latest statement, citing an unidentified spokesperson, without divulging the identities of the new shareholders.

The statement, issued more than two weeks after the CBIRC and the People’s Bank of China nationalised Baoshang Bank – a key part of Xiao’s financial conglomerate – offered a rare peek at the state-sanctioned dismemberment of Tomorrow Group, which holds stakes in hundreds of Chinese listed companies via proxies, spanning energy, financial services, technology and real estate, among a myriad of industries.

An undated photo of Xiao Jianhua from Weibo.com. Photo: Weibo

The Chinese authorities have been trying to carve up his business interests ever since Xiao left Hong Kong in January 2017 on the eve of the Lunar New Year for mainland China, where he is believed to be helping with one of the biggest investigations into deal making. Xiao has not been seen in public since, and is awaiting trial on charges of bribery and manipulating stock prices.

The CBIRC and the PBOC took over the operations of Baoshang Bank for two years, according to their May 24 order. China Construction Bank, one of the country’s biggest state-owned lenders, was entrusted with taking over Baoshang’s daily banking operations to protect the interests of depositors and customers after control of its management was assumed by the regulators, according to the statement.