'The darkest time': Hong Kong reels over bizarre disappearance of Chinese billionaire

Xiao Jianhua vanished from his luxury hotel residence, spirited away by China’s state security in a wheelchair and covered by a sheet

By Benjamin Haas in Hong Kong

Xiao Jianhua, a Chinese-born Canadian billionaire, reads a book outside the International Finance Centre in Hong Kong. Mystery now surrounds his exact whereabouts.

It has been more than two weeks since Xiao Jianhua last crossed the threshold of his luxury suite at the Four Seasons hotel in Hong Kong.
For a billionaire -- even one with a relatively low profile like Xiao -- to vanish would, in normal times, be alarming.
But when the place he has been sucked into is the black hole of China’s security state, nerves have become increasingly rattled.
Xiao is renowned for his close relationships and business dealings with elite families, including Xi Jinping's relatives. 

Many believed those connections made him untouchable.
His bolt hole at the Four Seasons – where suites can cost £21,000 a month – and the relatively safe environs of Hong Kong, which has a separate legal system from China, were seen as affording extra protection.
Xiao also employed multiple security firms and surrounded himself with a squad of female bodyguards who were apparently known to wipe the sweat from his brow.

University of Hong Kong photo of Xiao Jianhua, founder of Beijing-based Tomorrow Group.

But all that changed when he was seen being led away in a wheelchair by plain clothes Chinese security agents, his head covered by a sheet, and taken across the border into China, possibly by boat to avoid immigration checks, according to a report in the New York Times.
As Hong Kong prepares to mark the 20th anniversary of its handover from Britain to China, Xiao’s case, like the disappearance of five booksellers a little more than a year ago, highlights the erosion of promised freedoms and autonomy, and threatens to undermine the territory’s global reputation.
“There’s an increasing tendency of Hong Kong becoming more and more like just another Chinese city,” said Anson Chan, the former lawmaker and number two official in Hong Kong. 

“How else can we compete as a global city other than holding on to the rule of law, the independence of the judiciary and rights and freedoms, particularly freedom of expressions and free flow of information?
“These are Hong Kong’s strengths but every day we see an erosion of those strengths. The long arm of the mainland authorities reaches far and wide into Hong Kong.”
Xiao is the 32nd richest person in China, with a fortune of Y40bn (£4.7bn). 

He has more than tripled his wealth since 2013, and many believe it is a low estimate anyway. 

He controls Tomorrow Group, which has stakes in real estate, insurance, banking, coal and cement firms.
His vast wealth may have been his downfall, with the head of China’s stock market regulator saying “there must be a plan to capture and bring capital market crocodiles back to the mainland”.
Beijing will not allow tycoons to “suck the blood of retail investors”, Liu Shiyu, chairman of China Securities Regulatory Commission, said at a meeting on Friday, without directly naming Xiao. China’s stock markets experienced a politically embarrassing rout in 2015, erasing £4 trillion in stock value and severely denting the reputation of the country’s nascent markets.
Xiao helped Xi’s sister and brother-in-law dispose of assets after Bloomberg News reported on the wealth of the president’s family in 2012, and has invested in the same deals with other members of the political elite.
After Xiao was abducted, his wife filed a request for police assistance – but then tried to withdraw it and flew to Japan. 

While the Hong Kong police have said they are investigating the case, sources have described the case as far above their pay grade.
Hong Kong’s business world meanwhile is reconsidering the implications of dealing with Chinese firms, especially those controlled by politically connected elites.
“There used to be a feeling that if you invested with politically powerful people you were safe, but Xiao’s disappearance shows that doesn’t work,” said a businessman in Hong Kong with extensive dealings in China who asked not to be named. 

“A lot of people are wondering: if I can get snatched from my home in the middle of the night, is this worth it?”
Many saw Hong Kong as a sanctuary. 

As part of the agreement for the UK to transfer sovereignty to China, Hong Kong maintains separate laws, banking regulations and freedoms not found on the mainland, under an arrangement known as “one country, two systems”. 

Under that agreement Chinese police are forbidden from operating in the city.
“For anyone that has illusions Hong Kong is some kind of safe haven, they are lying to themselves. If China wants to arrest you, they will,” the businessman said. 

“Most people just hope they can get themselves, their family and their money out of Hong Kong before the Chinese can catch up with them.”
When five booksellers – publishers of thinly sourced stories on China’s leaders – disappeared in 2015, droves of foreign businessmen lobbied consulates in the city to register their concerns with Hong Kong and Chinese authorities.

In Hong Kong's book industry, everybody is scared
“This is the darkest time for Hong Kong’s human rights and freedom,” said Nathan Law, a lawmaker and member of the legislature’s security committee. 

“We used to think being taken away in the middle of the night would only happen in mainland China, but it happens in Hong Kong now.
“With the current government, and Xi Jinping leading China, the situation has gotten worse, and every Hong Kong citizen can feel it,” he added, saying there had been a rapid deterioration in the past five years.
Some constituents have told Law they are considering emigrating in light of the recent disappearance as they no longer feel safe. 

Leaving the city has long been a backup plan for wealthier residents, with massive waves of emigration following the 1989 Tiananmen Square massacre and in the years leading up to the handover from Britain in 1997.
One reason for the timing of Xiao’s abduction may be a high-level Communist party meeting in October where there is set to be a shakeup in the almighty Politburo Standing Committee. 

Xi Jinping, one of the most powerful leaders since Mao Zedong, has spent the past five years consolidating that power and wants to ensure there will be no interference in his plans.
Xiao’s investments with elite families mean he is privy to a host of potentially damaging information on a range of Communist party leaders. 

And this is not the only time he has felt political heat. 

When Chinese media reported he had privatised state assets below market value, Xiao moved to Canada, where he has citizenship, according to a 2014 New York Times profile.
Xiao also holds a diplomatic passport from Antigua and Barbuda as an ambassador-at-large with the power to “promote investment, trade and commerce, business and tourism development, and negotiate with the authorities and business entities of all states and territories”.
That appointment was not without controversy, with an Antiguan opposition politician alleging Xiao was given 200 passports to dole out as he wished.
There has been no official comment from China on Xiao’s disappearance and many still wonder what exactly he might have done.
“There are many powerful businessmen in Hong Kong, they could cross an unknown red line at any moment, and there are more and more of these red lines,” said Law, the outspoken pro-democracy lawmaker.
“Maybe one day I’ll cross a line without knowing and then the next day I won’t be in Hong Kong. That threat indeed exists.”

Peking Opera

WITNESSES SAY MISSING CHINA BILLIONAIRE XIAO JIANHUA TAKEN FROM HONG KONG HOTEL IN WHEELCHAIR
BY REUTERS 

The Four Seasons Hotel in Hong Kong, from which Xiao Jianhua disappeared on January 27.

Missing Sino-Canadian billionaire Xiao Jianhua was whisked in a wheelchair from a luxury Hong Kong hotel in the early hours of Jan 27 with his head covered, a source close to the businessman told Reuters.
Xiao was carried into his own car at the entrance to the Four Seasons serviced apartments in the heart of the Asian financial hub in what appeared to be a "smooth operation", another source with knowledge of the matter told Reuters.

The comments from the sources confirmed a report in the New York Times on the disappearance of Xiao, who has close ties to senior Chinese officials and their families.
Despite a statement issued in Xiao's name over 10 days ago that he was seeking medical treatment overseas and had not been abducted, his disappearance has rekindled fears over Hong Kong's status as an independent judicial entity of China.
"It is uncertain if Xiao was conscious when he left," the second source said, adding that it took at least a few people to carry the billionaire into the car.
"There was no struggle in the whole process. You could even say it was efficient. It was a smooth operation."
Reuters could not independently verify the circumstances at the time Xiao was taken out of the hotel or the condition of his health.
Assistants of Xiao were waiting in the lobby of the hotel's serviced apartments when at least five people, dressed in casual attire, came in, said the second source, who declined to be identified due to the sensitivity of the issue.
The group, which media have reported were mainland Chinese agents, were escorted to Xiao's room by his assistants and they left shortly after with the businessman and some luggage, the second source said.
The source close to Xiao who said the billionaire left the hotel in a wheelchair said his head was covered with some cloth, but it was not clear what the material was. 

The source added that as far as he knew Xiao did not use a wheelchair and there was nothing wrong with his legs.
A Hong Kong police source who was briefed on the probe into Xiao's disappearance had previously told Reuters the case was initially treated as a "kidnapping" following a complaint from someone connected to Xiao.
But after a review of CCTV footage at the Four Seasons and at the border checkpoint, police concluded that Xiao had voluntarily left Hong Kong.
They said Xiao had entered mainland China through a border checkpoint on Jan 27 and that they were seeking more information on the case from Chinese authorities.
Police and the Four Seasons did not immediately respond to requests for comment on Saturday.
China's Ministry of State Security, Foreign Ministry and Public Security Bureau have so far not responded to Reuters requests for comment on whether Chinese agents were involved in Xiao's disappearance.

CORRUPTION CRACKDOWN
Xiao's disappearance has sparked widespread media speculation that he has been drawn into Xi Jinping's crackdown on corruption, which has ensnared a string of Chinese executives.
Any indication that Xiao may have been forcibly removed from the former British colony would be a breach of the "one country, two systems" framework under which it has been governed since its return to mainland Chinese rule in 1997.
Xiao's case has already spooked many mainland Chinese working in the city, with some already making contingency plans and seeking advice on moving assets overseas.
Another source close to Xiao said his immediate family and the company's senior executives witnessed nothing unusual ahead of his disappearance.
Xiao's wife and brother were not in Hong Kong when he left the Four Seasons, the third source said, declining to say where they were at the time.
They immediately rushed back to Hong Kong, the source said.
"Everybody freaked out," the source said. 

"Nobody knew where he went, nobody knew what was happening."
Xiao's wife and brother have already "fled" Hong Kong to Canada, according to the third source.
Xiao's family, company executives and lawyers wrote a statement in Xiao's name "in a rush" to quell speculation that the billionaire had been kidnapped, the source said.
The statement, published on the front page of Hong Kong's Ming Pao newspaper five days after he went missing, said he was seeking medical treatment "outside the country" and "had not been abducted to the mainland."
It is uncertain if the family had been in touch with Xiao when the statement was drafted.
Outside law enforcement agencies, including those from mainland China, are not authorized to operate in Hong Kong, which enjoys wide-ranging freedoms not allowed on the mainland, including a separate legal system.
Police commissioner Lo Wai-chung said in a radio talk show last Saturday that there was no sign of mainland authorities enforcing the law in Hong Kong.
Xiao, who runs Tomorrow Holdings, a financial group headquartered in Beijing, was ranked 32nd on the 2016 Hurun China rich list, China's equivalent of the Forbes list, with an estimated net worth of $5.97 billion.
At least two of Tomorrow Group's statements posted after Xiao's disappearance on their social media account were deleted, pointing to what appears to be heightened sensitivity in Beijing over the case.