China sentences tycoon Xiao Jianhua to 13 years, fines his company $8.1 bln (updated)

ZhongAn Online P & C Insurance

19/08/2022 08:00

(adds details, context)
    BEIJING, Aug 19 (Reuters) - A Shanghai court on Friday
sentenced Chinese-Canadian billionaire Xiao Jianhua, not seen in
public since 2017, to 13 years in jail and fined his Tomorrow
Holdings conglomerate 55.03 billion yuan ($8.1 billion), a
record in China. 
    Xiao and Tomorrow Holdings were charged with illegally
siphoning away public deposits, betraying the use of entrusted
property, and the illegal use of funds and bribery, the Shanghai
First Intermediate Court said.
    It added the punishment was mitigated because both had
admitted their crimes and cooperated in recovering illegal gains
and in restoring losses. 
    China-born Xiao, known to have links to China's Communist
Party elite, was last seen whisked away in a wheelchair from a
luxury Hong Kong hotel in the early hours with his head covered,
a source close to the tycoon told Reuters at the time.
    Xiao and Tomorrow have "severely violated a financial
management order" and "hurt state financial security", the court
said, with the tycoon additionally fined 6.5 million yuan for
the crimes. 
    From 2001 to 2021, Xiao and Tomorrow gave shares, real
estate, cash and other assets to government officials totalling
more than 680 million yuan, to evade financial supervision and
seek illegitimate benefits, the court said.
    In July 2020, nine of the group's related institutions were
seized by Chinese regulators as part of a crackdown on risks
posed by financial conglomerates.  urn:newsml:reuters.com:*:nL1N2YL0D3 
    Among the nine firms were four insurers - Tianan Property
Insurance Co of China, Huaxia Life Insurance Co, Tianan Life
Insurance Co and Yi'an P&C Insurance Co - as well as New Times
Trust Co and New China Trust Co. The other three were Chengtong
Securities, Guosheng Securities and Guosheng Futures.
    The court said that from 2004, Xiao and Tomorrow controlled
multiple financial institutions and internet financial
platforms, including the failed Baoshang Bank, via multiple
layers of indirect shareholders and anonymous ownership.
    It said Xiao used the illegal gains for the acquisition of
financial institutions, securities trading and overseas
investment. But it acknowledged his attempts to make amends.
    "Xiao Jianhua has taken commendable actions, so he was given
a mitigated punishment in accordance with the law," it said. 
    When asked about Xiao's right to consular access as a
Canadian citizen during a regular briefing on Friday, Chinese
foreign ministry spokesperson Wang Wenbin said that because
Chinese law does not recognise dual nationality, Xiao was not
entitled to such rights. 
    The Canadian Embassy in Beijing did not immediately respond
to a request for comment. Tomorrow Holdings could not
immediately be reached for comment.
    ($1 = 6.8056 Chinese yuan renminbi)

 (Reporting by Tony Munroe, Ziyi Tang, Ryan Woo, Ellen Zhang,
Eduardo Baptista, and Meg Shen; Editing by Kim Coghill and
Stephen Coates)
 ((tony.munroe@thomsonreuters.com; +86 10 6627 1288; Reuters
Messaging: tony.munroe.thomsonreuters.com@reuters.net))