China continues to dismantle missing tycoon Xiao Jianhua’s financial empire

Rongtong Fund Management, which was once element of Xiao Jianhua‘s Tomorrow Team, has unveiled a management reshuffle, marking its official exit from the lacking Chinese magnate’s embattled monetary empire.

Zhang Wei was named Rongtong’s chairman on Friday, getting in excess of from Gao Feng who resigned citing personalized reasons immediately after 7 yrs in the posture, according to a statement issued by the asset administration organization.

Zhang is also the chairman of New Occasions Securities, which owns Rongtung, and was beforehand in charge of money administration at central govt-owned China Chengtong Holdings Team. Chengtong acquired a majority stake in New Situations Securities immediately after the government took above the brokerage from Tomorrow Team.

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The shake-up at Shenzhen-dependent Rongtong, a money supervisor overseeing US$36 billion in property, is a further phase taken by China’s regulators to defuse challenges in the money sector by cleaning up Xiao’s sprawling organization network spanning from financial institutions and brokerages to asset-management and trust firms.

A file picture of Xiao Jianhua. Picture: Handout alt=A file picture of Xiao Jianhua. Photograph: Handout>

The tycoon, who has not been found in community considering the fact that he remaining Hong Kong for the mainland in 2017, is thought to be aiding the government’s investigation into some superior-profile deal-producing. The authorities seized firms owned by Xiao, who was accused of rampant mismanagement that led numerous banking companies into insolvency and disrupted the monetary purchase.

The China Securities Regulatory Commission (CSRC) on Friday claimed that it experienced officially finished its handle over New Occasions Securities considering that using in excess of the Beijing-based mostly brokerage in July 2020, and permitted it to restart its enterprise.

In March, the CSRC granted China Chengtong approval to invest in a 98.2 for every cent stake in New Situations Securities, whose senior management were also reshuffled. Chengtong is owned by China’s condition-owned asset regulator, with fund investments and economic products and services currently being its key small business.

Founded in 2001, Rongtong Fund is 60 for each cent owned by New Times Securities, with the rest of the stake held by Nikko Asset Administration. The agency has 82 cash underneath administration totalling 237.3 billion yuan (US$36 billion), in accordance to its web site.

In its heyday, Xiao’s Tomorrow Group owned stakes in 44 monetary establishments, whose complete worth was estimated at 3 trillion yuan. He employed the sprawling network to illegally acquire financial loans and designed arbitrages to transfer profits and finance his other organizations.

Baoshang Lender, a crucial pillar of Xiao Jianhua’s Tomorrow Team, was declared bankrupt in 2020. Picture: Reuters alt=Baoshang Bank, a key pillar of Xiao Jianhua’s Tomorrow Group, was declared bankrupt in 2020. Image: Reuters>

The govt declared Baoshang Lender bankrupt in 2020, a crucial pillar of Xiao’s Tomorrow Group, after the team illegally borrowed 156 billion yuan from the lender from 2005 to 2019 and failed to repay the personal loan. Hengfeng Bank and Jinzhou Financial institution, two other creditors underneath Tomorrow Group, ended up also declared bancrupt.

The disposal of other economic property of Tomorrow Group are nevertheless continuing.

Guosheng Securities, which has been under regulatory regulate for two a long time, might before long discover a purchaser, in accordance to Worldwide Economical Information, a publication under the point out-run People’s Every day.

This post at first appeared in the South China Morning Publish (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For extra SCMP stories, you should discover the SCMP application or stop by the SCMP’s Facebook and Twitter pages. Copyright ¬© 2022 South China Morning Article Publishers Ltd. All legal rights reserved.

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Melissa M. Taylor

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