Exclusive | Why Beijing’s plan to break up mysterious tycoon Xiao Jianhua’s business empire hit the buffers

Tomorrow Group ordered to dispose of almost US$24bn in assets, but finding a buyer at the right price is proving difficult

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Sources have suggested that Xiao Jianhua will face trial later this year. Photo: Handout

Published: 7:00am, 18 Apr 2018Updated: 3:14pm, 24 Sep 2018

A plan by Chinese authorities to split up the business empire controlled by mysterious billionaire Xiao Jianhua has run into difficulties after the group and potential buyers disagreed on the prices of key assets, according to public corporate filings and sources who are close to those deals.

Beijing has ordered Xiao to divest about 150 billion yuan (US$23.9 billion) worth of assets in 2018 to repay bank loans, the South China Morning Post reported last month.

Xiao had already divested about 100 billion yuan the previous year.

As a result, Tomorrow Group, the flagship corporate vehicle of Xiao, and its hundreds of affiliated entities, have been putting its stakes in banks and trust firms on sale in an act of “self-rescue by downsizing”, sources told the Post.

“The end game is to have a transparent structure that regulators can ‘see through’,” said one of the sources, who has been involved in the divestment deals.

“Tomorrow Group will have just one bank licence, one insurance licence, one trust investment licence … and it can’t have actual control of other financial institutions.”