Statement purportedly by Chinese oligarch's Tomorrow Group hits back at regulators for breaking up Xiao Jianhua's conglomerate
Tomorrow Group, the sprawling conglomerate with businesses from financial services to real estate in the middle of one of China's biggest corporate break-ups, appears to be hitting back at a government move to seize its subsidiaries.
In a four-point, unsigned statement released via Tomorrow Group's WeChat account on Saturday, the conglomerate founded by the Chinese oligarch Xiao Jianhua pointed to several procedural questions that implied that financial regulators were so set on taking over the group's assets that they ignored the debt-restructuring efforts already under way.
Hours after appearing on WeChat, the statement was removed for "breach of rules," according to an automated notice on the social network app, and could not be found on Tomorrow Group's website, which showed its last update as July 2016. The authenticity of the statement could not be immediately verified. Phone calls and emails to Tomorrow Group's office in Beijing went unanswered.
Still, coming in the wake of the takeovers by China's financial regulators of several insurers, financial trusts and brokers linked to Xiao and the Tomorrow Group, the statement raised questions about the way by which the Chinese authorities are going about in taking down one of the country's most powerful oligarchs. The crackdown began three years ago, when China's central bank and financial regulators put the country's freewheeling capital market under scrutiny to prevent debt-fuelled buyouts from hurting the financial system.
On the eve of the Lunar New Year in 2017, Xiao was persuaded to leave his luxury hideout at the Four Seasons residence in Hong Kong to return to mainland China for investigations by financial regulators.
Xiao, who has not been seen since in public, is awaiting trial at an unknown location on charges of bribery and manipulating stock prices, while key pieces of his empire had been taken over one by one, shut down or sold.
Huaxia Life Insurance, Tian'an Property Insurance, Tian'an Life, Yi'an Property Insurance, New Times Trust and New China Trust were placed under state ward to "protect the rights of policy holders, customers and serve the public's interest," the China Banking and Regulatory Commission (CBIRC) said in a statement on Friday. Separately, New Times Securities, Guosheng Securities and Guosheng Futures were placed under the government's management for a year, the China Securities Regulatory Commission (CSRC) said.
The press offices of both the CBIRC and the CSRC in Beijing were not staffed on a weekend to respond to queries, and did not respond to phone calls and emails for comment.
Last year, the banking regulator seized control of Tomorrow Group's Baoshang Bank, citing its track record in errant lending, and disclosed that the conglomerate had disposed of stakes in 10 regional and provincial lenders.
Neither the banking and insurance regulator nor the securities industry watchdog associated any of the nine financial firms under their ward to Tomorrow Group, although ownership links to all nine companies were confirmed by the conglomerate in its statement on Saturday.
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