The trial of the 50-year-old billionaire, who was allegedly forcibly taken to China in January 2017, will commence on Monday, government agency Global Affairs Canada said late on Sunday, according to a report in Canadian newspaper The Globe and Mail.
Officials in the Canadian consular body are “monitoring this case closely, providing consular services to his family and continue to press for consular access”, spokesperson Patricia Skinner told the newspaper.
No other information on the case will be released due to privacy reasons, the government statement added.
Mr Xiao is the founder of investment company Tomorrow Group and was reported missing in 2017 after an increase in prosecutions of Chinese tycoons accused of bribery and other misconduct in a widespread anti-corruption crackdown.
Officials in China have never stated whether Mr Xiao was held in detention or disclosed the possible charges against him.
One official working with the country’s securities regulator had said in February 2017 that Chinese people in foreign countries who were accused of misconduct would be “captured and returned”, without elaborating further.
Foreign ministry spokesperson Zhao Lijian on Monday said he was not aware of the situation.
The Chinese-born businessman’s wealth was estimated to be $6bn before he became untraceable, said the Hurun report, which tracks China’s wealthy personalities.
Shortly after he had gone missing, Hong Kong police investigating the man’s disappearance said he had crossed the border onto the mainland.
An advertisement in Ming Pao, a Chinese language newspaper in Hong Kong, had refuted the allegation that he was taken against his will.
The Wall Street Journal had reported last month, quoting people familiar with the matter, that Mr Xiao’s trial was imminent.
The tycoon’s elder brother Xiao Xinhua said their family was awaiting an “acceptable conclusion” from the Chinese authorities.
“After five years of quietly waiting, our family is still, based on my brother’s strict instructions, putting faith in the Chinese government and Chinese law,” Mr Xiao said, adding that the case was “very complicated and full of drama,” the report stated.
The businessman could face charges of illegally collecting deposits, something earlier used by Chinese authorities against “individuals accused of selling real estate or raising funds for investment from regular people under false pretences or without proper licence,” said the report.
If found guilty, Mr Xiao could face a sentence of five years or more in prison, The Globe and Mail reported.
The case comes at a time when Chinese president Xi Jinping has increasingly exerted his control over Hong Kong, steadily compromising the autonomy the territory was promised after it was returned to China by Britain in 1997.
The Communist party rolled out a harsh national security law in Hong Kong in 2020 after months of protests over a planned law relating to the extradition of criminal suspects to the mainland.