Xiao Jianhua

Hong Kong police insist missing tycoon entered mainland legally as China probes newspaper publisher

Billionaire’s firm controlled company affiliated with financial newspaper, report says

PUBLISHED : Monday, 13 February, 2017, 8:01am
UPDATED : Tuesday, 14 February, 2017, 5:25am

The publisher of a financial newspaper reportedly tied to missing Chinese tycoon Xiao Jianhua has been placed under government investigation, prominent news outlet Caixin reported on the weekend.

Citing multiple sources, the report said the investigation into Securities Daily publisher Xie Zhenjiang came as ­Xiao helped mainland authorities with their ongoing probe into the 2015 stock market rout.

Xiao is the founder of financial group Tomorrow Holdings and had lived at Hong Kong’s luxury Four Seasons Hotel in recent years.

He has not been seen since he returned to the mainland last month with his female guards and two government investigators, as well as two other people he knew.

Hong Kong police spokesman Wilson Fok maintained that Xiao entered the mainland via a border control point. That statement came after a New York Times report on Saturday that Xiao was believed to have gone by boat from Hong Kong and eluded border controls.

Reuters cited a source close to Xiao as saying the tycoon was whisked in a wheelchair from a luxury Hong Kong hotel in the early hours of January 27 with his head covered, confirming other details of the Times’ report. Reuters quoted another source as saying Xiao was carried into his own car at the entrance to the hotel’s serviced flats.

“It is uncertain if Xiao was conscious when he left,” the second source said, adding that it took at least a few people to carry the billionaire into the car. “There was no struggle ... You could even say it was efficient.”

While the authorities have not accused Xiao of any wrongdoing, his disappearance coincided with a vow by the stock market watchdog to go after market manipulators. It also comes in the sensitive lead-up to the Communist Party’s five-yearly senior personnel reshuffle late this year.

Securities Daily is a commercialised offshoot of the official Economic Daily and one of the outlets designated by the China Securities Regulatory Commission to carry notices for listed companies.

But shares of the paper’s affiliated company have been suspended from trading on the mainland’s over-the-counter “third board” since January 4.

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

Caixin reported late on Saturday that Xie had been sacked and expelled from the party for unspecified serious violations of discipline, adding that he was under investigation.

Economic Daily had also demanded Securities Daily correct a series of “economic issues” within two months, the report said. Both incidents were related to recent developments involving Tomorrow Holdings and Xiao, it said. Repeated calls to Securities Daily went unanswered on Sunday.

According to Caixin, Securities Daily ’s affiliated company was ­effectively controlled by Tomorrow Holdings through several related major shareholders and people acting in concert, even though the paper was the company’s biggest shareholder.

Citing a Securities Daily source, Caixin reported that Tomorrow had controlled the newspaper’s operations and editorial output since the affiliated company was established. By late Sunday night, Tomorrow had not issued a response to the report through its official WeChat account, which has been the main outlet for public statements from the firm since Xiao disappeared from Hong Kong on January 27.

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