ExclusiveEx-Tomorrow Group aide released as China speeds up downsizing of Xiao Jianhua’s empire, sources say

Wen Yingjie, a top aide to the Chinese tycoon, was set free without trial in June after three years under investigation, three independent sources said

China’s banking regulator said risks had been brought under control after it sold stakes in more than 10 institutions and took control of Baoshang Bank

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The Tomorrow Group business empire controlled by mysterious billionaire Xiao Jianhua was worth trillions of yuan. Photo: AFP

Published: 5:00am, 9 Jul 2019Updated: 5:23am, 9 Jul 2019

China’s plan to split up the business empire controlled by billionaire Xiao Jianhua appears to have gathered pace, with a former Tomorrow Group board secretary set free in June without trial after being under investigation for the last three years, three separate sources told the South China Morning Post.

Wen Yingjie, a top aide to Chinese tycoon Xiao, was released after charges of embezzlement were dropped, according to the three sources, who all spoke on condition of anonymity because of the sensitivity of the case. The Post was unable to reach Wen for comment.

Wen’s reported release came soon after China’s financial industry regulator gave a positive assessment of the progress authorities have made in downsizing the Tomorrow Group conglomerate founded by Xiao and based in Inner Mongolia’s Baotou city, suggesting that Beijing is ready to wrap up the high-profile case.

One source, who was briefed on the development, said the release of Wen, who was placed under investigation several months before the Tomorrow Group founder, could open a new option for Xiao, although he could still be prosecuted.

Xiao could be treated in similar way to Wen after the required assets disposal at Tomorrow Group is done

Unnamed source

In the best-case scenario, “Xiao could be treated in similar way to Wen after the required assets disposal at Tomorrow Group is done,” the source said.

The China Banking and Insurance Regulatory Commission (CBIRC) said in a statement in early June that Tomorrow Group had sold its holdings in more than 10 financial institutions as part of a state-mandated process of divesting assets to reduce financial risks. The CBIRC also confirmed that the financial institutions in which Tomorrow Group still owned stakes were in a stable condition.

“Given the efforts by all parties, the overall risks of Tomorrow Group … have been gradually brought under control,” the regulator said in a brief statement on June 9.

It was the first time the regulator had disclosed information about the disposal of asset at the conglomerate since Xiao returned to mainland China in early 2017.