In a significant development within the Chinese financial landscape, authorities have initiated an investigation into Liu Tianran, the son of Liu He, a former vice-premier and a close ally of President Xi Jinping. This news comes from multiple informed sources, shedding light on the ongoing scrutiny of high-profile figures within China's economic sphere.

Liu Tianran is reported to be under investigation primarily for suspected financial-related corruption, as indicated by seven individuals who spoke on the condition of anonymity due to the sensitive nature of the probe. Liu He, often referred to as China's economic tsar, has been a key player in shaping the country's economic policies, particularly during his tenure negotiating with the Trump administration on trade agreements.

The investigation into Liu Tianran is particularly noteworthy given his background. He is one of the so-called “princelings”—the offspring of senior Communist Party officials—who often enjoy privileged positions within the business sector. Liu Tianran founded an investment firm, Skycus Capital, in 2016, where he initially served as the chair. The Financial Times had previously confirmed his identity as the son of Liu He.

A former colleague of Liu Tianran has suggested that the investigation has been ongoing for some time, potentially resulting in his detention. According to this insider, Liu may have already lost his freedom, while two others reported that he has been under scrutiny for a minimum of six months. This raises concerns about the severity of the allegations against him.

Sources revealed that the investigation originally began in connection with Liu Tianran’s involvement in the aborted $37 billion initial public offering (IPO) of Ant Group, which was poised to be the largest IPO in history before being halted by Chinese regulators. During the course of this investigation, authorities uncovered additional, unrelated corruption cases, which have reportedly been escalated to President Xi Jinping for review.

This inquiry aligns with an ongoing campaign by Xi Jinping to impose stricter regulations on the Chinese finance sector. Recent government measures have included slashing salaries for bankers and increasing scrutiny of fundraising practices and deal-making activities among top investment funds. Notably, several prominent venture capitalists have faced questioning and detention over fundraising practices, including Chen Datong, a significant player in China's semiconductor investment scene.

Christopher Johnson, a former top CIA analyst specializing in China, commented on the implications of Liu Tianran's case. He noted that if the allegations are substantiated, they could reflect a trend in investigations authorized by Xi Jinping. These probes, which target the illicit financial gains of close associates of senior leaders, often place individuals in a precarious position between possible exoneration and formal detention.

Looking deeper into the political ramifications, Dennis Wilder, who has served as the head of China analysis at the CIA, indicated that this investigation could have serious implications for Liu He himself. Despite having met with foreign officials, including Janet Yellen, the U.S. Treasury Secretary, Liu He’s public engagements have notably diminished over the past year. Observers suggest that this decline in visibility may be linked to the ongoing inquiry into his son.

Wilder further implied that Liu He may be experiencing a fallout with Xi Jinping, a long-time acquaintance from childhood. He remarked, “Given Liu He’s political problems and reduced access to Xi Jinping, he may no longer wield the influence necessary to safeguard his son from the ongoing investigations.”

Attempts to contact Liu Tianran for comment were unsuccessful; however, a spokesperson close to him dismissed the allegations as unfounded and entirely false. The Financial Times also reached out to Liu He and Skycus Capital for their comments but received no response.

Corporate records reveal that Liu Tianran officially stepped down as chair of Skycus in April 2017, only six months prior to his father's elevation to the influential 25-member Politburo of the Chinese Communist Party. Subsequently, Liu He was appointed vice-premier with oversight of the financial sector. Chinese regulations prohibit the offspring of high-ranking officials from managing businesses in sectors regulated by their parents.

Despite stepping back from a formal leadership role, reports indicate that Liu Tianran, who is also known by the English name Andy, continued to play an active role in Skycus’s operations, engaging in deal-making activities. The firm has attracted significant investments from state-owned enterprises, including the China Development Bank, China Mobile, and Industrial Bank Co., along with tech giants such as Tencent and JD.com.

Liu Tianran's professional journey initiated as a journalist at the Economic Observer, a Chinese business newspaper, before he transitioned to work in CCB International, a subsidiary of a major state bank. He later joined a Shanghai government-backed fund prior to founding Skycus Capital.