Is missing tycoon Xiao Jianhua losing control of his business empire?

Zhou Xin
A general view shows the Four Seasons Hotel building in Hong Kong on February 1, 2017. A Chinese billionaire has been abducted in Hong Kong by mainland agents, according to reports on January 31.
Anthony Wallace | AFP | Getty Images

Doubts are rising over missing ­tycoon Xiao Jianhua's grip on his vast business empire, with one source close to Xiao's family ­saying the billionaire's contact with the outside world has been ­severed "in the last couple of days".

The source said that in the days immediately after his return to the mainland from Hong Kong on January 27, Xiao had been allowed limited external contact, including phone calls to his wife.

"That's not the case any more," the source said last night.

But another source close to the investigation insisted that Xiao was still in contact with his wife and his business associates.

Xiao has not been seen since he disappeared on the eve of Lunar New Year.

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The saga took another turn yesterday with The New York Times reporting that Yao Long, one of ­Xiao's employees, was taken from Hong Kong International Airport on Sunday night as he tried to board a flight for Tokyo.

Hong Kong's Immigration ­Department was investigating whether Yao's travel document was valid, the report said.

The department said it would not comment on individual cases. But an officer at the department's detention centre at Ma Tau Kok said a man named Yao Long had been held there since Sunday night and was taken away by officers from the department's investigation branch yesterday morning . Under Hong Kong law, the authorities can hold Yao without charge for up to 48 hours.

Xiao, has built up a sprawling business empire of financial vehicles and listed companies that could send major shocks through to the market if their shares ­collapsed.

Sources have told the South China Morning Post that Beijing is eager to avoid any market fallout from the Xiao case.

Shares linked to Xiao and his Beijing-based Tomorrow Group have stabilised since an initial ­sell-off.

Shares of Baotou Tomorrow Technology gained 0.23 per cent yesterday, Baotou Huazi Industry fell 1.75 per cent, while Xishui Strong Year gained 0.44 per cent.

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Political analysts said Xiao's deals with the country's elite and his knowledge of the transactions could be used to influence power at the top as the mainland prepares for a personnel reshuffle at a key Communist Party congress later this year.

Xiao's disappearance was also related to Beijing's campaign to investigate tycoons involved in a mainland stock market rout in 2015, according to people familiar with the matter.

Without naming names, Liu Shiyu, chairman of the China ­Securities Regulatory Commission, said in comments published last week that the authorities would capture more "big crocodiles" and take them back to the mainland.

The Post was unable to reach Xiao or his wife. Repeated phone calls to a mainland mobile phone number previously used to contact him went answered.

The billionaire's disappearance has also raised fears that Beijing is eroding Hong Kong's autonomy.

In response to concerns that Xiao was abducted by mainland agents, Chief Executive Leung Chun-ying said: "No one should speculate on a matter like this, and anyone who has information should provide it to police."

After a report on Saturday that Xiao was believed to have been transported by boat from Hong Kong and eluded border controls, Hong Kong police spokesman Wilson Fok reiterated on the weekend that Xiao entered the mainland via a border control point. Authorities on the mainland have not provided any information regarding Xiao.

Tomorrow Group said in a brief statement on its official ­WeChat account on February 2 that the company and its affiliated businesses were operating as usual.

The company's previous two statements, which said Xiao "was receiving treatment overseas", were deleted shortly after being published.

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