Key stocks tied to missing billionaire Xiao Jianhua hit by 4.3bn yuan sell-off

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Bautou Tomorrow Technology suspended from trading after hitting daily-fall limit again; Xishui Strong Year briefly fell by 9.5 per cent

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File photo of Xiao Jianhua, founder of Beijing-based Tomorrow Group. Three of the stocks in which the missing billionaire owns the most substantial stakes continued to sell off in Shanghai on Monday. Photo: Handout

Laura He

Published: 5:17pm, 6 Feb 2017Updated: 11:06pm, 6 Feb 2017

Three of the stocks in which missing Chinese billionaire Xiao Jianhua owns the most substantial stakes continued their sell off in Shanghai on Monday after his reported disappearance in a Hong Kong hotel on January 27, with a total of 4.3 billion yuan in market capitalisation wiped out since last Friday, the first trading day of the Lunar New Year.

In the latest development, sources said Xiao, the founder of the Tomorrow Group, had returned to the mainland “legally” to help authorities in investigations related to the Chinese stock market crash in 2015 and over his business ties with relatives of some top Chinese leaders. Hong Kong police chief Stephen Lo Wai-chung said there was no evidence that Xiao was kidnapped by mainland agents from a Hong Kong hotel.

Xiao, born in 1971 in the eastern Shandong province, was ranked 32nd with his wife on Hurun’s China Rich List in 2016, with an estimated net worth of US$5.97 billion.

Three stocks which Xiao directly controls through Tomorrow Group led the declines in Shanghai, underperforming the Shanghai Composite, which rose 0.5 per cent to finish at 3,156.98 on Monday.

Cement manufacturer Xishui Strong Year, which is 10.45 per cent held by Xiao via Zhengyuan Investment, briefly sank 9.5 per cent to a low of 15.88 yuan earlier in the morning. It closed down 4.8 per cent to 16.7 yuan, adding to a 10 per cent decline last Friday.

Baotou Huazi Industry, a beet sugar refiner and edible oils maker that is 5.2 per cent owned by Xiao’s Baotou Beipu, ended down 1.8 per cent at 11.95 yuan after falling as much as 6.3 per cent. The stock also dropped limit-down by 10 per cent in the previous session.

Bautou Tomorrow Technology, a raw materials producer which is 34.6 per cent held by Zhengyuan and 3.4 per cent held through Baotou Beida Tomorrow Resource Technology, was suspended from trading for a second straight session on Monday after falling 5 per cent to 9.66 yuan. The stock carries a “ST” tag, which refers to shares suffering losses for two consecutive years or more, and has a daily-drop limit of 5 per cent. Other ordinary shares on the Shanghai and Shenzhen stock exchanges have a daily-trading limit of 10 per cent.