By Yifan Xie in Shanghai and Josh Chin in Beijing
The Tomorrow Group building in Beijing. The group’s founder is missing and stocks connected to his business empire were battered on Friday.
The disappearance of Chinese billionaire Xiao Jianhua, one of several prominent financial figures who have gone missing since China’s 2015 stock-market crash, is sending shivers through China’s financial sector.
The uncertainty surrounding Xiao’s whereabouts sent stocks related to his business tanking Friday as trading resumed after the Lunar New Year holiday.
Trading volume on the Shanghai market dropped to its lowest level in more than a year amid tepid sentiment further hurt by liquidity concerns.
Speculation over Xiao’s absence erupted earlier this week with unconfirmed reports that he had been abducted in Hong Kong by Chinese law-enforcement agents.
Speculation over Xiao’s absence erupted earlier this week with unconfirmed reports that he had been abducted in Hong Kong by Chinese law-enforcement agents.
Hong Kong police said on Wednesday they had asked mainland authorities for more information after determining Xiao, a Hong Kong resident, had crossed into China on Jan. 27.
The news came a week after Xu Xiang, a star Chinese fund manager was sentenced to 5 1/2 years in prison for stock manipulation, the highest-profile investor convicted after a summer of stock-market turmoil in 2015 wiped out a year’s worth of gains and roiled global markets.
“In a weak market, investors are very scared about any kind of uncertainty,” said Shen Zhengyang, an analyst at Northeast Securities, saying that Xiao’s sway over the market is “on a much larger scale than Xu Xiang’s.”
Xiao, who claims he models his approach on U.S. stock wizard Warren Buffett, is the founder of Tomorrow Holding, a sprawling web of investments from insurance and real estate to beet farming. After graduating from the Peking University in 1990 while still a teenager, Xiao dazzled the market by investing in unknown brokerage firms, banks and insurers just before they took off.
Now in his mid-40s, Xiao was No. 32 on the Hurun Report’s latest list of China’s wealthiest individuals with an estimated personal fortune of $6 billion.
In a brief statement late Thursday, Tomorrow Holding said the company and its subsidiaries were “operating normally.”
The news came a week after Xu Xiang, a star Chinese fund manager was sentenced to 5 1/2 years in prison for stock manipulation, the highest-profile investor convicted after a summer of stock-market turmoil in 2015 wiped out a year’s worth of gains and roiled global markets.
“In a weak market, investors are very scared about any kind of uncertainty,” said Shen Zhengyang, an analyst at Northeast Securities, saying that Xiao’s sway over the market is “on a much larger scale than Xu Xiang’s.”
Xiao, who claims he models his approach on U.S. stock wizard Warren Buffett, is the founder of Tomorrow Holding, a sprawling web of investments from insurance and real estate to beet farming. After graduating from the Peking University in 1990 while still a teenager, Xiao dazzled the market by investing in unknown brokerage firms, banks and insurers just before they took off.
Now in his mid-40s, Xiao was No. 32 on the Hurun Report’s latest list of China’s wealthiest individuals with an estimated personal fortune of $6 billion.
In a brief statement late Thursday, Tomorrow Holding said the company and its subsidiaries were “operating normally.”
It didn’t offer any news about Xiao’s status and the statement didn’t prevent shares of firms in which it has significant stakes from plummeting on Friday.
Xishui Strong Year Co. Ltd Inner Mongolia, a cement producer and insurance provider, and Baotou Huazi Industry Co., which produces sugar and electronic parts, both dropped the 10% maximum. Baotou Tomorrow Technology Co. Ltd., a chemical firm, was down 5%, the cap for shares identified as at risk for delisting.
At an aging building in a technology park in northwestern Beijing, identified as Tomorrow Holding’s address in regulatory filings, guards refused to let a reporter move past the lobby Friday afternoon.
A notice posted at the entrance of the building said Tomorrow Holding “has not received any notice requiring it to cooperate with a legal investigation.”
Xishui Strong Year Co. Ltd Inner Mongolia, a cement producer and insurance provider, and Baotou Huazi Industry Co., which produces sugar and electronic parts, both dropped the 10% maximum. Baotou Tomorrow Technology Co. Ltd., a chemical firm, was down 5%, the cap for shares identified as at risk for delisting.
At an aging building in a technology park in northwestern Beijing, identified as Tomorrow Holding’s address in regulatory filings, guards refused to let a reporter move past the lobby Friday afternoon.
A notice posted at the entrance of the building said Tomorrow Holding “has not received any notice requiring it to cooperate with a legal investigation.”
It threatened legal action against media and others who spread rumors about the company.
Earlier in the week, the company posted, then deleted, two statements attributed to Xiao saying the China-born financier has a Canadian passport and was receiving medical treatment abroad.
Earlier in the week, the company posted, then deleted, two statements attributed to Xiao saying the China-born financier has a Canadian passport and was receiving medical treatment abroad.
The second statement, in which Xiao proclaimed his loyalty to the Communist Party, also appeared as a full-page ad in Hong Kong’s Ming Pao newspaper on Wednesday.
A number of high-profile Chinese businessmen have gone missing for various lengths of time since Xi Jinping’s pledge to sweep away corruption four years ago.
Several property and energy moguls disappeared in 2013 in connection with an investigation into powerful former security czar Zhou Yongkang, who was sentenced to life in prison for corruption in 2015.
After the 2015 stock-market rout, authorities detained around a dozen securities-industry executives, accusing some of “malicious short selling,” including Xu Xiang, the founder of Shanghai-based Zexi Investment Co.
He and two others pleaded guilty in December to using hundreds of trading accounts to manipulate the stocks of dozens of companies.
A number of high-profile Chinese businessmen have gone missing for various lengths of time since Xi Jinping’s pledge to sweep away corruption four years ago.
Several property and energy moguls disappeared in 2013 in connection with an investigation into powerful former security czar Zhou Yongkang, who was sentenced to life in prison for corruption in 2015.
After the 2015 stock-market rout, authorities detained around a dozen securities-industry executives, accusing some of “malicious short selling,” including Xu Xiang, the founder of Shanghai-based Zexi Investment Co.
He and two others pleaded guilty in December to using hundreds of trading accounts to manipulate the stocks of dozens of companies.
He hasn’t spoken publicly since being arrested in 2015.
Guo Guangchang, chairman of financial conglomerate Fosun International, briefly disappeared in late 2015.
Guo Guangchang, chairman of financial conglomerate Fosun International, briefly disappeared in late 2015.
He hasn’t given details of his absence beyond saying he was assisting authorities with an unspecified investigation.
Heather Hsu, a private-equity fund manager at Shanghai Beaconbridge Investment said that even though little is known about why Xiao went missing, his disappearance recalls Mr. Guo’s.
“His absence can’t be simply a business matter,” Ms. Hsu said
Tomorrow Holding has been in the limelight before.
Heather Hsu, a private-equity fund manager at Shanghai Beaconbridge Investment said that even though little is known about why Xiao went missing, his disappearance recalls Mr. Guo’s.
“His absence can’t be simply a business matter,” Ms. Hsu said
Tomorrow Holding has been in the limelight before.
In June 2008, the online edition of People’s Daily, the Communist Party’s flagship newspaper, questioned the company’s role in the listing of Pacific Securities.
The small, Yunnan-based broker went public on the Shanghai Stock Exchange in 2007, bypassing the long queue for initial public offerings despite suffering two consecutive years of losses.
Pacific Securities was controlled by Tomorrow Holding prior to its listing.
In response to a 2014 report by the New York Times that Xiao has helped broker deals for members of China’s political elite, including relatives of Xi Jinping, Tomorrow Holding denied that the financier’s wealth stemmed from political connections.
“Almost all of China’s top-tier investors are politically influential,” said Brock Silvers, managing director at Kaiyuan Capital, a Shanghai investment advisory firm.
In response to a 2014 report by the New York Times that Xiao has helped broker deals for members of China’s political elite, including relatives of Xi Jinping, Tomorrow Holding denied that the financier’s wealth stemmed from political connections.
“Almost all of China’s top-tier investors are politically influential,” said Brock Silvers, managing director at Kaiyuan Capital, a Shanghai investment advisory firm.
Compared with Fosun’s Guo, who was the top decision maker behind its many deals, Xiao has kept a low profile, he said.
Calls to Xishui Strong, Baotou Tomorrow Technology, and Baotou Huazi went unanswered Friday. The website of Tomorrow Holding wasn’t accessible.
Calls to Xishui Strong, Baotou Tomorrow Technology, and Baotou Huazi went unanswered Friday. The website of Tomorrow Holding wasn’t accessible.
The firm didn’t respond to calls and emails seeking comments.
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