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'Abduction' of China tycoon sparks fear in Hong Kong
by Staff Writers
Hong Kong (AFP) Feb 1, 2017

Missing Chinese tycoon rose from rags to riches
Hong Kong (AFP) Feb 1, 2017 - Chinese billionaire Xiao Jianhua's reported abduction from Hong Kong by mainland security agents has shone a spotlight on the business dealings and political connections of the financier some local media have dubbed China's J.P. Morgan.

Xiao went from a poor family to become one of China's richest men, founding the Beijing-based Tomorrow Group which describes itself as one of the first companies to deal with equities investments domestically.

He has said he takes inspiration from US business magnate Warren Buffet.

"He trusted his management, which is my ideal style," Xiao said of Buffet in a 2013 interview with China-based website "21st Century Business Herald", published on China's Sina news portal.

"But given our country's environment, we are still a long way from realising this process."

There is speculation Xiao has fallen foul of China's high-profile anti-corruption drive, which some critics say has been used to target President Xi Jinping's political opponents.

Overseas Chinese-language news site Bowen Press reported Xiao could also have been connected to an "anti-Xi coalition".

China's People's Daily describes Xiao as coming from a "peasant family" in the northern mainland Chinese province of Shandong, developing into a child prodigy and attending Peking University at 15 to study law.

According to the Hurun Report, which ranks China's wealthy, Xiao is now worth almost $6 billion and oversees an empire reported to cover a range of areas, including financial institutions, insurance and property.

He is said to have business connections with China's political elite but in 2014 denied a report in the New York Times that he had earned establishment backing after authorities cracked down on pro-democracy protests in Tiananmen Square in 1989.

During that time he was head of Peking University's official student union and the Times reported he had sided with administrators and tried to defuse the rallies.

A response to the article at the time from Xiao's spokeswoman said his business was built "from scratch" and its success was due to hard work.

During the Tiananmen protests Xiao had tried to ensure students' activities were lawful "to avoid tragedy", she said.

The spokeswoman also denied Tomorrow Group had any links to a deal in which the Times said a company Xiao had co-founded had paid $2.4 million to buy shares in an investment firm held by the sister and brother-in-law of President Xi.

Hong Kong's South China Morning Post has reported that Xiao has mainly lived outside China since 2007, after financial irregularities were discovered during the listing process of a company part-owned by Tomorrow Group.

He is said to have been staying long-term at Hong Kong's harbour-front Four Seasons hotel, which has become a favourite haven for Chinese tycoons who have left the mainland, according to some reports.

The mystery over the reported abduction from Hong Kong of a Chinese billionaire deepened Wednesday after a newspaper advert appeared in his name pledging loyalty to China, in a case that has heightened fears over Beijing's meddling.

The whereabouts of financier Xiao Jianhua -- one of China's richest men -- are unclear after reports in overseas Chinese-language media that he was taken from Hong Kong by mainland security agents last week.

The reports suggested Xiao's disappearance was part of China's ongoing anti-corruption campaign, which some critics believe has been used to target President Xi Jinping's political opponents.

Xiao had been staying at Hong Kong's Four Seasons hotel and was looked after by female bodyguards, local media reported.

A front-page advert in Hong Kong newspaper Ming Pao, attributed to Xiao, said he had "always loved the (ruling Communist) party and the country" and would soon meet with media.

"I personally believe the Chinese government is civilised and has rule of law," the advert read.

"I have not been kidnapped."

Xiao, who said in the statement he was a Canadian citizen, insisted he was being treated for an illness overseas.

The founder of Beijing-based Tomorrow Group, Xiao was previously reported to have denied allegations he fled to Hong Kong in 2014 to escape the corruption crackdown.

He is said to have acted as a broker for the Chinese leadership, including for Xi's family.

But overseas Chinese-language news site Bowen Press said Xiao could also have been connected to an "anti-Xi coalition".

It is illegal for mainland agents to operate in semi-autonomous Hong Kong, but the disappearance of five booksellers known for publishing salacious titles about Beijing's leadership in 2015 prompted widespread criticism China had overstepped that line.

One of the men, Lee Bo, vanished from Hong Kong, triggering international condemnation and local protests.

Lee always insisted he had gone over the border voluntarily.

Hong Kong's security bureau said the government "will not allow non-Hong Kong law enforcement officers to take law enforcement actions in Hong Kong".

But James To of the Democratic Party said there was a "credible suspicion" Hong Kong's "one country, two systems" deal had been breached.

"After the Lee Bo fiasco people are very concerned about whether Hong Kong residents or people lawfully staying in Hong Kong will be protected," To told AFP.

- 'Credible suspicion' -

The South China Morning Post reported Xiao was currently in mainland China, not receiving medical treatment, and was only in contact with his family.

Xiao had wanted to move some of his businesses to Japan after feeling unsafe in Hong Kong, Initium news site said.

His wife was now in Japan after reporting his case to Hong Kong police then withdrawing it, the report said.

According to the Financial Times Xiao was led away by Chinese public security agents from an apartment at the Four Seasons.

The hotel said there was an "active police investigation" when asked about the case.

Hong Kong police said they had received a request for assistance over a "mainland citizen" Saturday, but a family member had later retracted it.

They said the person it referred to had crossed a border control point between Hong Kong and China on Friday.

The Canadian consulate said it was aware of the reports and its officials were "in contact" with authorities.

Xiao said in the Ming Pao statement he was a permanent resident of Hong Kong, and held a diplomatic passport.

In 2015, he was made "ambassador-at-large" for Antigua and Barbuda, according to news site Caribbean360, which pictured Xiao at the time with the country's prime minister Gaston Browne.

Hong Kong-based analyst Willy Lam said Xiao may have been targeted because he knew "potentially embarrassing details" about financial actions involving major Chinese political clans.

China's anti-corruption drive was launched after Xi took power in 2012 and has brought down government officials and corporate executives.

Billionaire Guo Guangchang, chairman of one of the country's biggest private-sector conglomerates Fosun, vanished from public view in 2015 in connection with an investigation by authorities, and then re-emerged.

In 2016 the chairman of one of China's most prominent fashion firms also disappeared, returning to work a week later amid speculation he had been caught up in the anti-corruption campaign.

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