China Is Dismantling the Empire of a Vanished Tycoon

China Is Dismantling the Empire of a Vanished Tycoon

Three years after Xiao Jianhua was snatched from a luxury hotel in Hong Kong, Beijing is making it clear that his style of freewheeling finance is a thing of the past.

The billionaire Xiao Jianhua in 2013 outside the International Finance Center in Hong Kong, not far from the spot where he would be abducted a few years later.Credit...Next Magazine, via Associated PressJuly 18, 2020, 8:09 a.m. ET

HONG KONG “” Xiao Jianhua was once a trusted financier to China's ruling elite who came to represent an era of unbridled capitalism.

But three years ago, he was snatched from a Hong Kong luxury hotel and disappeared into Chinese custody. Now, the empire he built is being dismantled by the authorities in Beijing, as China sends a strong message that its era of debt-fueled excess is over.

On Friday, two regulators announced coordinated moves to seize companies worth hundreds of billions of dollars tied to Tomorrow Group, the umbrella company that Mr. Xiao controlled for more than two decades.

China's banking and insurance regulator said it had taken over four insurers and two trust firms connected to Tomorrow Group, while the securities regulator said it had seized control of two securities firms and a futures company,