* Exiled Chinese billionaire says HK no longer "safe"
* Concerns spread among Chinese in HK over tycoon's
* Lawyers and financiers say wealthy Chinese planning to
* Xiao now in China, able to contact some people - source
* Xiao’s wife and brother fled HK for Canada - source
By Julie Zhu, Venus Wu and James Pomfret
HONG KONG, Feb 10 The mysterious disappearance
from Hong Kong of Xiao Jianhua, a China-born billionaire, has
sent a chill through mainland business circles linked to the
city, and some are looking to move their assets, say financiers,
lawyers and Chinese businessmen.
Hong Kong, a global financial centre, has served as a major
hub for Chinese capital since the former British colony returned
to Chinese rule in 1997, with a raft of Chinese IPOs and a
wealth management industry catering to scores of Chinese
But reports that Xiao was abducted by Chinese agents from
the luxury Four Seasons hotel have helped undermine confidence
in the legal autonomy that has underpinned the economy.
Hong Kong police say Xiao crossed the border into China on
Jan. 27 through a checkpoint and are still investigating the
China's Ministry of State Security, Foreign Ministry and
Public Security Bureau have so far not responded to Reuters
requests for comment on whether Chinese agents were involved in
A source close to Xiao, who holds a Canadian passport, said
he is now in an unspecified location in China, and that Xiao's
wife and brother had "fled" Hong Kong to Canada.
It wasn't possible to contact Xiao's relatives. The Canadian
consulate in Hong Kong said they had no further information on
A second source close to Xiao said on Thursday he was still
able to get in touch with the tycoon, with "some difficulties".
Shortly after his disappearance a local newspaper ad
purporting to be from Xiao himself said he hadn't been abducted
but was seeking medical treatment "outside the country".
The uncertainty is unnerving businessmen with links to the
"I don't dare go to Hong Kong," said Guo Wengui, a Chinese
property and investment tycoon who said he knows Xiao and used
to visit Hong Kong regularly.
Now he says he would not consider Hong Kong a safe place for
Guo has lived in exile for several years, having been
investigated by Chinese authorities several times, including in
connection with a fraud case. No charges have ever been laid,
and Guo said he had done nothing wrong.
Memories are still fresh in Hong Kong of the abduction last
year of five men linked to a book publisher that specialised in
gossip about China's leaders. Three were detained while in
China, but two with foreign passports were taken there against
their will from Thailand and Hong Kong.
The financial hub has a lot to lose if investor confidence
is shaken by threats to the independence of its legal system.
A report on China's private wealth market, conducted jointly
by China Merchants Bank and Bain & Company in mid 2015, found 71
percent of about 2,800 Chinese high-net-worth individuals chose
Hong Kong as their favourite offshore investment destination.
The Hong Kong Monetary Authority, which oversees the banking
sector, and the Financial Secretary's office, did not
immediately reply to requests for comment, but have long
maintained the financial sector is robust and functions
One well-connected mainland Chinese financier in Hong Kong
who also knew Xiao said he and others were not feeling
"I'm very nervous ... My (mainland) friends don't feel it's
as safe as before. People are making contingency plans," the
source said, adding some were rethinking their exposure and
residency in the Asian financial centre.
A senior corporate lawyer with a global law firm said some
of his mainland Chinese clients living in Hong Kong had asked
him for advice on moving assets out in the two weeks since
Xiao's case broke, possibly to Japan, Singapore or South Korea.
"They want to change location. They freaked out," he said.
Xiao, who runs financial group Tomorrow Holdings and has
close ties with some of China's top leaders and businessmen, is
ranked 32nd on the 2016 Hurun China rich list, China's
equivalent of the Forbes list, with a net worth of $6 billion.
Until his disappearance, Xiao had for some years resided at
the Four Seasons Place serviced apartments in the heart of the
city, a favourite haunt of wealthy mainland Chinese businessmen.
A person with knowledge of the matter at the hotel said
there had been a “significant decline” in Chinese occupancy
since the news broke.
“Many mainlanders checked out," the person said.
The hotel, including its three Michelin-starred restaurant
Lung King Heen, was quieter now, said a Hong Kong regular who
often meets mainland Chinese clients there.
The corporate lawyer source, who also frequents the Four
Seasons, said several of his mainland Chinese clients had moved
out of the property recently, citing concerns from the incident
The Four Seasons Hotel declined to comment.
(Writing by James Pomfret; Editing by Will Waterman)