A mainland tycoon believed have close ties to Communist Party elites has insisted he did not flee to Hong Kong and denied a rumour that he has been a target of a mainland investigation. Xiao Jianhua, founder of the Beijing-based Tomorrow Group, dismissed a report by overseas website Boxun last week as “completely false”. His spokesperson said no one from the central leadership has called for his arrest in a statement to Ta Kung Pao , a pro-party newspaper in Hong Kong. “Leaders rarely give instructions against an individual,” the statement said. “Mr Xiao has been living in Hong Kong for many years …and is a law-abiding entrepreneur.” A report published on Boxun said President Xi Jinping had called for an investigation into Xiao but the 42-year-old businessman had fled to Hong Kong after senior officials from the Ministry of Public Security tipped him off. The report added Xiao is currently staying with the son of Dai Xianglong, the former governor of the People’s Bank of China. It also accused him of being allied to Zeng Wei, the son of former Vice President Zeng Qinghong, who was reported to have been involved in the clandestine privatisation of the state-owned Luneng power generating company in Shandong, which had more than US$9 billion in net assets. Caijing magazine, a well-known financial news publication, reported in 2007 that two obscure private companies had bought a combined 91.6 per cent stake in Luneng for about 3.73 billion yuan (HK$4.68 billion), far lower than the 73.8 billion yuan total asset value of the once state-owned enterprise. The report didn’t mention Zeng nor Xiao by name, but later rumours and the Boxun article alleged Xiao and Zeng benefitted from the acquisition. Xiao hit back in his statement by insisting he has not seen Dai's son for a long time. He also claimed that Zeng never made underhand deals during the restructuring of Luneng. “[The restructuring] was not halted by any associate government departments,” it said. “The profit from the two-year investment [into Luneng] was no better than [the interest from depositing] the money in the bank.” The company’s lawyers are negotiating with the websites that made or circulated the reports, the statement said, adding many people are “demonising” the company. “The Tomorrow Group have undergone inspections from state departments multiple times over the past two decades, and the results demonstrate that the company is legal,” it said. The speculation against Xiao also surfaced after a New York Times report this month which suggested the Tomorrow Group has close connections with the party elite, including the family of Xi. Quoting one unnamed source, the report said the president’s sister Qi Qiaoqiao and her husband Deng Jiagui sold their shares in an investment firm to a company founded by Xiao for at least US$2.4 million. Xiao admitted earlier this month that Xi’s family had sold shares but he did not draw any link with his company or him personally. He also denied he has benefited from the 1989 Tiananmen protests by allegedly helping defuse the student demonstrations as reported by The New York Times .