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Beijing newspaper investigated for links to tycoon

BEIJING — The head of a state-backed securities industry newspaper is under investigation for links to controversial financial tycoon Xiao Jianhua, several sources close to the matter told Caixin.

BEIJING — The head of a state-backed securities industry newspaper is under investigation for links to controversial financial tycoon Xiao Jianhua, several sources close to the matter told Caixin.

Mr Xie Zhenjiang, 63, has been removed from his post as the president of Beijing-based Securities Daily and chairman of Securities Daily Media Company, the newspaper’s business arm listed on the New Third Board for small and medium-sized enterprises, sources said. Mr Xie has been expelled from the Communist Party for serious disciplinary violations, they added.

The newspaper has been ordered to undergo a two-month “rectification” for various business issues, sources said. It is unclear what the rectification is about and whether the company’s normal operations would be disrupted.

The shake-up at Securities Daily is linked to Mr Xiao, one of the richest businesspeople in China and founder of the conglomerate Tomorrow Holdings Group Limited, separate sources told Caixin.

Mr Xiao and Tomorrow Group have been under a spotlight since late last month after media reports that the tycoon, who has spent most of his time in Hong Kong since 2014, has been assisting mainland authorities with investigations on bribery and stock market manipulation.

Mr Xiao, 46, was listed by the 2016 Hurun Chinese rich list as the 32nd-richest person in China with a net worth of US$6 billion (S$8.5 billion). He established Tomorrow Group in 1999. It later expanded into a wide range of businesses including real estate, coal, chemicals, insurance, securities and banking. It owns stakes in a number of listed firms and financial institutions.

Sources had told the South China Morning Post that four visitors from China met Mr Xiao at a pre-arranged rendezvous in Hong Kong and the latter entered China via normal border control procedures.

A staffer at Securities Daily, who asked not to be named, told Caixin that Tomorrow Group had obtained absolute control over the newspaper’s business operations and intervened on editorial issues over the years through various affiliates that are among Securities Daily Media’s shareholders.

“We have been controlled by Tomorrow Group for many years. It is an open secret at the newspaper,” said the source, adding the newspaper’s business head has always been appointed by Tomorrow Group.

Another source from the Securities Daily said by controlling the business side, Tomorrow Group has constantly intervened in the newspaper’s editorial decisions. It has forced the newspaper to made public apologies to some companies for negative reports and sent a list of firms to the editorial team asking them not to criticise them. Most firms on the list are subsidiaries and affiliates of Tomorrow Group, said the source.

In July 2013, the China Securities Regulatory Commission launched inspections into Hengtai Securities, in which Tomorrow Group held a 17 per cent stake as of June 30, 2016, and criticised it for using clients’ wealth management funds to finance deals with connected parties. But Securities Daily published a report applauding Hengtai’s wealth management business at that time. CAIXIN

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