Exclusive | China’s missing financier placed a bet on Wanda’s privatisation, but will he show up to collect?

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Entity controlled by missing tycoon Xiao Jianhua had pitched investors investing in Wanda’s privatisation deal, sources say

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A photo of Xiao Jianhua taken on April 21, 2016, at a robotics symposium at Chinese University of Hong Kong. Photo: AFP PHOTO/The Chinese University of Hong Kong (CUHK)

Xie Yu

Published: 7:00pm, 28 Jul 2017Updated: 3:17pm, 24 Sep 2018

Xiao Jianhua, the financier who was plucked from his Hong Kong hideout and has been in the custody of Chinese authorities since late January, was an investor in magnate Wang Jianlin’s privatisation of Dalian Wanda Commercial Property, according to two bankers with knowledge of the deal.

Xiao’s investment, made through intermediaries and unknown to Wanda’s executives last year, underscores the intricate web of influence woven by the man who’s known as the financier to China’s elites.

Wang Jianlin during the June 30 opening of his Harbin Wanda Cultural Tourism City theme park in northeastern China. Two weeks after the opening, he would sell the theme park along with 77 of his hotels in China’s largest real estate transaction. Photo: SCMP/Simon Song

The relationship between Wanda Commercial and Xiao was forged in early 2016, when Wang -- then China’s wealthiest man, with businesses from cinemas to hotels and theme parks -- was raising funds to take his Hong Kong-listed Wanda Commercial private. The 62-year-old magnate wanted to transfer the listing of Wanda Commercial to the Shanghai bourse, where stocks were trading at 17 times earnings on average, more than double its valuation in Hong Kong.

His bankers at China International Capital Corp. assembled a consortium of investors and lenders to come up with HK$34.45 billion (US$4.4 billion) in equity financing and loans.

The consortium would offer HK52.80 cash to buy up each share of Wanda Commercial, a 44.5 per cent premium over the stock’s last price on March 29 before the plan was unveiled last year, according to documents filed with the Hong Kong bourse.