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China jails tycoon Xiao Jianhua for 13 years, slapping an unprecedented US$8 billion fine on his Tomorrow Group
- Canadian-Chinese tycoon guilty of illegally collecting public deposits, using entrusted assets in breach of trust, illegal use of funds and bribery, a Shanghai court says
- Sentencing concludes a clean-up of Xiao’s financial empire, which was part of Beijing’s efforts to control financial risks
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A court in China has sentenced Xiao Jianhua, the founder of Tomorrow Group, to 13 years in prison, and slapped a fine of 55 billion yuan (US$8.1 billion) on the conglomerate, bookending the dramatic break-up of China’s largest privately owned financial empire after a five-year investigation.
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The Canadian-Chinese tycoon – who disappeared from a luxury hotel in Hong Kong in 2017 – was found guilty of illegally collecting public deposits, using entrusted assets in breach of trust, illegally using funds and bribery, according to a statement by the Shanghai No 1 Intermediate People’s Court on Friday. Xiao was also personally fined 6.5 million yuan.
The sentencing closed the clean-up of Xiao’s financial empire comprising assets worth 3 trillion yuan, and is part of Beijing’s ramped-up efforts to control financial risks in recent years.
“Tomorrow Group and Xiao Jianhua’s criminal acts severely damaged the financial management order, which severely risked the national financial safety, and severely encroached the professional integrity of public servants,” said the Shanghai court in its ruling on Friday. “They should be strictly punished based on the law.”
Tomorrow Group and Xiao illegally used client funds and entrusted assets of 148.6 billion yuan via Baoshang Bank, the Shanghai court said on July 4. The bank was taken over by the government in May 2019 and was placed into bankruptcy a year later.
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