Chinese-Canadian billionaire Xiao Jinhua had been missing since 2017. The last heard of him was his arrest by Chinese police at the Four Seasons Hotel in Hong Kong. The businessman is the founder of the Tomorrow Group company and is linked to senior CCP leaders. Does Xi Jinping’s cleansing continue ahead of the upcoming 20th CCP Congress?

According to a statement from the Shanghai No. 1 Intermediate People’s Court released on Aug. 19, Xiao Jinhua was sentenced to 13 years in prison. He was guilty of illegally collecting public deposits, using funds, and bribing state-owned enterprises. He must also pay a fine of nearly $1 million.

Who is Xiao Jinhua?

The Chinese tycoon founded Tomorrow Group in 1999, a conglomerate of several companies engaged in financial services, the chemical industry, construction, and various businesses. Baoshang Bank, Xishui Strong Year Co Ltd Inner Mongolia, Baotou Tomorrow Technology, and Huaxia Life, among others, were under his umbrella. 

In 2017, as reported by his family, the billionaire was detained in Hong Kong by Chinese police officers who stormed into the Four Seasons Hotel and forcibly took him away. However, the next day, the family retracted the complaint because they had “resumed contact” with Xiao. 

Hong Kong police refused to release CCTV footage of the tycoon’s alleged arrest. However, it was later confirmed that he was detained in China.

After this episode, the billionaire’s whereabouts remained a mystery. No one heard from him again until the Shanghai Court issued a statement with a judgment against him and also against Tomorrow Group.

Xiao Jinhua’s links to the Chinese Communist Party

The Chinese tycoon in his 50s studied at Beijing University Law School and was a well-known student leader. Xiao Jianhua also had political ambitions and developed ties with Li Keqiang, then secretary of the Central Committee of the Communist Youth League, who recommended him to become the president of the University’s student union. During the events leading up to the Tiananmen massacre in 1989, Xiao Jinhua turned away from the student democracy movement and supported the Chinese authorities. With the start of his company in 1999, Xiao began to weave ties with several influential CCP leaders and families, including former party secretary general Jiang Zemin.

According to China Venture, on April 14, 2014, Xiao put together a complex structure for his entire financial empire, Tomorrow Holdings, created shell companies, set up subsidiaries that traded with each other, and transferred funds from listed companies to each other. In this way, all operations and those involved remained in the shadows, and no one could know about them.

In 2015, China’s two largest stock markets fell sharply. Economic measures were taken to rescue the damaged companies, such as million-dollar financial bailouts and state-owned banks cutting interest rates. However, serious consequences were felt in early 2016. Thousands of shareholders lost their money, many of whom were citizens of China’s working middle class.

Xi Jinping closely watched the affair, and investigations were launched into corruption, embezzlement, and stock market manipulations. 

In a report to Chinese-Australian writer and dissident Yuan Hongbing, Xiao’s professor at Beijing University, he said the stock market collapse was a “financial coup d’état” promoted by Jiang Zemin’s sons and directed at Xi. Because Xiao was the principal money manager of the CCP’s prominent families through his entire secret financial machinery behind Tomorrow Holdings, he wielded his power to generate chaos and turmoil in the Chinese economy. 

After a couple of years of inquiries, Xiao was arrested by Chinese police in Hong Kong and transferred to China. However, some Hong Kong media revealed that Xiao Jianhua cooperated with the investigation during his detention. Apparently, the businessman provided confidential information about the financial assets of prominent names linked to the CCP. Xi Jinping’s authorities used the information to clear those not involved in the 2015 stock market collapse.

In July 2020, authorities seized control of nine Tomorrow Group financial institutions, yet the corporation never issued any statements of protest or complaint. In 2021, Chinese regulators extended the receivership period for the nine financial companies for another year.

Experts and analysts who follow the whole corruption clean-up process by Xi Jinping express that the 13-year prison sentence is “light” for the Chinese tycoon. He was only convicted of financial crimes, representing a “warning” from the Chinese leader Xi to all the wealthy families who are against him.

Chen Kuide is the executive chairman of Princeton China Society. He told Radio Free Asia on Aug. 20 that, judging from public opinion after Xiao Jianhua was arrested and sent to mainland China, Xi Jinping may have intended to use him as a symbolic trophy to intimidate the faction that wants to prevent his re-election. However, the sentence results announced on Friday showed that all the charges were relatively economic and did not involve any interest or political group behind them. The 13-year sentence was also light.

“(The sentence) is not as severe as expected, it’s not as politicized or conspiratorial, but it seems to be economic, financial, and that’s basically the result of a settlement.” Chen Kuide believes Xiao Jianhua’s light sentence represents Xi Jinping’s pursuit of an implicit pact with opposition forces within the party.

Sign up to receive our latest news!

By submitting this form, I agree to the terms.