China to Start Trial of Tycoon Taken From Hong Kong Hotel

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(Bloomberg) -- A Chinese-Canadian tycoon who was seized at a Hong Kong hotel five years ago and has lost much of his business empire to the Chinese government is going on trial on Monday.

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The Canadian embassy in Beijing said in a statement that it was aware Xiao Jianhua’s trial would take place. “Canadian consular officials are monitoring this case closely, providing consular services to his family and continue to press for consular access,” it added.

Chinese Foreign Ministry spokesman Zhao Lijian said he wasn’t aware of a trial involving Xiao when asked about it Monday at a regular press briefing in Beijing.

The Wall Street Journal reported earlier that Xiao would be charged by prosecutors in Shanghai with illegally collecting public deposits, which in China usually involves unlicensed institutions or individuals gathering funds from the public.

Chinese criminal law provides for jail terms of less than three years to more than a decade for convictions under the offense, though in 2013 a court in the eastern city of Wenzhou handed a woman a suspended death sentence because she “cheated investors” out of more than 570 million yuan.

Xiao has been missing since early 2017 when he was taken from his room at the Four Seasons in Hong Kong, where he had been staying for several years after fleeing China. The Asian nation’s central bank later identified Tomorrow Group, the investment conglomerate owned by Xiao, as one of several “financial holding companies” that should be scrutinized in its ownership structure, related transactions and sources of funding.

China Takes Over Companies Linked to Disappeared Financier

In mid-2020, regulators in China assumed control of nine financial firms linked to Xiao, among them Huaxia Life Insurance Co., Tianan Life Insurance Co., Tianan Property Insurance Co. and New Times Trust Co.

The government’s move came as authorities stepped up efforts to maintain financial stability, in part because Covid-19 was harming economic growth and sour loans were piling up.

Before his disappearance, the Hurun Report of China’s richest people said Xiao, a student leader at the time of 1989 pro-democracy protests, was part of a fortune estimated at almost $6 billion.

(Updates with comment from China’s Foreign Ministry.)

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