Xiao Jianhua was last seen at a luxury hotel in Hong Kong on the Lunar New Year. Two years later, the business tycoon is still missing but his businesses are starting to decline due to massive liabilities.
Xiao is charged with bribery and manipulating stock prices in 2016 but his trial is yet to push through because he was ‘abducted’.
His empire is slowly being controlled by the Chinese government as a move to prevent crackdown ‘big crocodiles’.
According to the South China Morning Post, Xiao refused to cooperate last 2017 with his ‘fundraising by fraud’ charge, which is punishable by life imprisonment.
In the recent news, one of Xiao’s key business piece, Baoshang Bank was seized by the Chinese government due to credit risks. This bank has billions worth of outstanding bonds recorded in 2016, however, liabilities are also eating up the credits, with a total of $22.7 billion interbank loans.
The Baoshang Bank has not published any annual reports since 2016, and the last one filed shows 206 outstanding bonds worth $10.71 billion. The report also showed a massive liabilities record of $22.7 billion, which is a 65% increase from the 2014 record.
The bank is based on inner Mongolia and has not released financial results for several years, which regulators revealed to have ‘significant interbank borrowings.’
The People’s Bank of China and the China Banking (PBOC) and Insurance Regulatory Commission (CBIRC) took over the management of the bank. Meanwhile, the China Construction Bank is overlooking the daily banking operations of the Baoshang Bank.
In defense of the Chinese government, they are taking over the said bank to prevent more problems with credit structure. Regulators even dismissed the bank from the stock market and suspended trading rights.
Xiao Jianhua is still missing up to this date but reports resurfacing are claiming that he was in Mainland China.