Caixin reported (July 18) that the Chinese government had taken over nine financial companies formerly controlled by the mysteriously fallen tycoon Xiao Jianhua for alleged infractions in an unusually aggressive move to attack risks from his once free-wheeling financial empire. The China Banking and Insurance Regulatory Commission took over four insurance companies and two trust firms, while the China Securities Regulatory Commission seized two securities companies and one futures firm, according to official statements issued on July 17. The companies had combined total assets amounting to more than 1.2 trillion yuan ($171.5 billion) and all were previously controlled by Xiao Jianhua. Regulators said the move is intended to protect investors’ legitimate interests.

(Comment: Xiao Jianhua was once a trusted financier to China’s ruling elite. He was snatched on January 27, 2017, from a Hong Kong's luxury Four Seasons hotel and disappeared into Chinese custody. The empire he built, part of the Tomorrow Group, is now being dismantled by the authorities in Beijing, as China sends a strong message that its era of debt-fueled excess is over. Observers say that with the takeovers, China’s top leadership is bringing to heel a key figure from a time of freewheeling finance in which wealthy executives used their political connections to build huge companies that scooped up trophy assets at home and abroad. But, they cautioned, the move also risks a public showdown with a tycoon who knows about the secret wealth of people in China’s ruling class. The Tomorrow Group confirmed for the first time on July 18 that Xiao Jianhua was on the mainland and that he was cooperating with the government.)