Mainland businessman Xiao hits back at claims he fled to Hong Kong and is under investigation

A mainland tycoon believed have close ties to Communist Party elites has insisted he did not flee to Hong Kong and denied a rumour that he has been a target of a mainland investigation.

Xiao Jianhua, founder of the Beijing-based Tomorrow Group, dismissed a report by overseas website Boxun last week as “completely false”. His spokesperson said no one from the central leadership has called for his arrest in a statement to Ta Kung Pao, a pro-party newspaper in Hong Kong.

“Leaders rarely give instructions against an individual,” the statement said. “Mr Xiao has been living in Hong Kong for many years …and is a law-abiding entrepreneur.”

A report published on Boxun said President Xi Jinping had called for an investigation into Xiao but the 42-year-old businessman had fled to Hong Kong after senior officials from the Ministry of Public Security tipped him off. The report added Xiao is currently staying with the son of Dai Xianglong, the former governor of the People’s Bank of China.

It also accused him of being allied to Zeng Wei, the son of former Vice President Zeng Qinghong, who was reported to have been involved in the clandestine privatisation of the state-owned Luneng power generating company in Shandong, which had more than US$9 billion in net assets.

Caijing magazine, a well-known financial news publication, reported in 2007 that two obscure private companies had bought a combined 91.6 per cent stake in Luneng for about 3.73 billion yuan (HK$4.68 billion), far lower than the 73.8 billion yuan total asset value of the once state-owned enterprise. The report didn’t mention Zeng nor Xiao by name, but later rumours and the Boxun article alleged Xiao and Zeng benefitted from the acquisition.