The New York Times uncovers Xiao Jianhua and Jack Ma's secret network and pulls out the "princelings"

The New York Times reported on Monday (July 22) that Xiao Jianhua, a businessman with close ties to relatives of senior Chinese politicians, has long secretly invested in companies owned by technology giant Jack Ma.

The New York Times published two reports on Monday, exposing the secret business relationship between jailed Chinese businessman Xiao Jianhua and tech tycoon Jack Ma. The report revealed that Xiao Jianhua, as a "white glove" for the top CCP dignitaries, had operated asset transfers for the sister of Chinese leader Xi Jinping.

The New York Times and Wired China found that Xiao Jianhua's Tomorrow Group secretly acquired a large number of shares in several companies under Jack Ma in five years through a network of shell companies and agents, and never disclosed the relevant information to the public. The report pointed out that this was Xiao Jianhua's usual method. His specialty was to act as a white glove for China's princelings, helping powerful CCP officials and their relatives transfer their property overseas and conduct asset transactions. Xiao Jianhua also operated asset transfers for Xi Jinping's sister.

In 2014, Xiao Jianhua's spokesperson confirmed to The New York Times that Xi Jinping's sister and brother-in-law had decided to sell their 50% stake in a Beijing investment company, and the buyer was Xiao Jianhua's Tomorrow Group.

Ma Yun, who has been out of the public eye for a long time, no longer holds an official position in any of the companies he founded. The evidence obtained by The New York Times did not directly show that Ma Yun was aware of Xiao Jianhua's investment. Alibaba also denied the business relationship between Ma Yun and Xiao Jianhua and said that the New York Times' investigation had no factual basis.

The above investigation also showed that Xiao Jianhua was the man behind the largest shareholder of Ma Yun's securities company. Through four offshore companies and a fifth company held by Huang Youlong, the husband of famous film and television star Zhao Wei, Xiao Jianhua controlled about one-third of the shares of Ma Yun's securities company Yunfeng Financial, which made Xiao Jianhua's network holding more than Ma Yun.

Xiao Jianhua disappeared from a Hong Kong hotel in 2017 during China's anti-corruption campaign, and was subsequently sentenced to 13 years in prison for bribery and corruption. Reports say that although he is still serving his sentence in prison, his relationship with Jack Ma's company has not been interrupted by his imprisonment. In 2020, when Jack Ma sought to list the electronic payment company Ant Financial Group, Xiao Jianhua's Tomorrow Group still controlled about 0.1% of Ant Financial's shares, with a valuation of more than $300 million.

The report also revealed that the "reasons" behind Xiao Jianhua's investments may have more to do with giving China's princelings a piece of the country's economic growth than any pressing business needs. In 2014, Jack Ma became a money-making machine for China's political elite, with records showing that Chinese companies owned or supervised by relatives of six current or former members of the Politburo of the Communist Party of China invested in Jack Ma's businesses.