Xiao Jianhua Sentenced to 13 Years for Financial Crimes

One example of its messy financial ties was its stake in Baoshang Bank. Tomorrow Group used the bank to extend loans to other Tomorrow Group companies, but kept those loans off the books for years. Then in 2019, the bank was pushed to the brink of bankruptcy, prompting regulators to take it over.

The next year, regulators also stepped in to dismantle Tomorrow Group, in a move intended to send a strong message to China’s corporate sector to rein in excessive borrowing.

The court on Friday said that between 2001 and 2021, Mr. Xiao and Tomorrow Group used shares, real estate holdings and other assets worth $100 million to bribe government officials and evade financial supervision.

“The criminal acts of Tomorrow Groups and Xiao Jianhua seriously damaged the financial management order, seriously jeopardized the national financial security, seriously infringed on the integrity of the state staff, and should be severely punished according to law,” the court said in its statement on Friday.

Mr. Xiao would eventually become ensnared in an anti-corruption drive waged by the man who took charge of China in 2012, Mr. Xi.

But the two had a prior connection. Mr. Xiao had previously bought shares in an investment company owned by the sister of Mr. Xi and her husband, according to a New York Times investigation. At the time, a spokeswoman for Mr. Xiao told The Times that the couple “did it for the family.”

Zixu Wang contributed reporting.

Article source: https://www.nytimes.com/2022/08/19/business/chinese-canadian-billionaire-xiao-jianhua-sentenced.html