At least 30 employees of a Hong Kong billionaire who was whisked to China about two weeks ago have been stopped from leaving the mainland, with many more probably unable to travel, two people familiar with the matter said on Monday.
It has become increasingly apparent that Beijing’s dragnet extends far beyond billionaire Xiao Jianhua (肖建華) and is closing in on dozens, if not hundreds, of his employees in one of the most far-reaching crackdowns on a private Chinese conglomerate in the nearly four decades since the nation began to embrace free markets.
Xiao, one of China’s wealthiest and most politically connected financiers, was said to have been removed from his apartment at the Four Seasons in Hong Kong in a wheelchair, his head covered by a sheet or a blanket. He is believed to have been taken by boat to the mainland where he is in police custody, according to people familiar with the investigation into his disappearance.
Xiao’s inside knowledge of the financial dealings of China’s most powerful families might have overridden any concerns about violating Hong Kong’s autonomy under the “one country, two systems” arrangement.
In another development, an employee who worked on the computer systems at Xiao’s companies was detained at Hong Kong airport on Sunday evening, suspected of committing passport violations while trying to fly to Japan, people familiar with the matter said.
The employee, who is still being held, was in Hong Kong working on securing the companies’ networks, one of the people said.
The moves signal that Xiao, 45, is in serious trouble and that his companies are unlikely to be spared amid a widening crackdown.
Companies under Xiao’s Tomorrow Group, which was founded in 1999, control tens of billions of US dollars in assets and its holdings include stakes in more than 30 financial institutions.
His apparent abduction comes before an important Chinese Communist Party meeting expected to take place in October or November. There, the party is to name as many as five new members to the Chinese Politburo Standing Committee, the group of seven men at the pinnacle of political power.
In the months leading up to the conclave, held once every five years, the party puts stability at a premium and Xiao, through his substantial holdings, is seen as having the potential to bring instability to China’s stock markets.
Bill Bishop, who publishes the widely read Sinocism newsletter on Chinese politics, said that China’s leaders, including Chinese President Xi Jinping (習近平) and the Chinese Communist Party’s top anti-graft enforcer Wang Qishan (王岐山), might see Xiao’s company as a “systemic threat to the stock market” in a year when stability is paramount.
“It seems like a no-lose move for Wang and Xi,” Bishop said by e-mail.
The employee detained by the Hong Kong Immigration Department was stopped while trying to fly to Tokyo from Hong Kong International Airport on Sunday night, two people said.
The man, Yao Long, worked in information technology at one of Xiao’s companies and had traveled to Hong Kong to work on strengthening the company’s cybersecurity within China, one person said.
The Hong Kong Immigration Department, which was holding Yao, was investigating whether his travel documents are valid, the person said.
It is unclear how Yao would have been able to enter Hong Kong without valid travel documents, but one possibility is that China invalidated the passport while he was in Hong Kong, the person said.