Justice Toogood said the penalties, including Xiao's ban, were intended to be "so significant as to deter and denounce non-compliance".
He said the company "failed abysmally" to meet the rigorous reporting and monitoring requirements for 1588 transactions totalling $105.4m.
Of the transactions, 173 were ruled by the judge to be suspicious and required reporting under the AML/CFT.
Xiao asked the High Court to set aside Justice Toogood's judgment but was rejected in March last year.
He then challenged the ruling in the Court of Appeal earlier this month, before New Zealand's second highest court issued its judgment yesterday afternoon.
"Ultimately, this appeal must turn on whether Mr Xiao can show a miscarriage of justice as a result of the judgment being entered," Justice Patricia Courtney said on behalf of the three judges, also comprising Justice Geoffrey Venning and Justice Rachel Dunningham.
"This requires him to demonstrate that, had he been given the opportunity to be heard at the formal proof hearing, the outcome would likely have been different.
"However, as [counsel assisting the court Stephen Hunter] acknowledged, Mr Xiao made no attempt to explain what evidence he might have adduced (had leave been given to do so) or what submissions might have been made that could have resulted in a different outcome."
The Court of Appeal ruled that Xiao's application to set aside Justice Toogood's judgment failed because he did not provide any evidence, nor point to any ground on which the claim might have been defended and resulted in a different outcome.
"It is reasonable to expect that if such material existed, it would have been advanced in this appeal," the judgment reads.
"However, nothing has been advanced on which we could conclude that, even if Mr Xiao had been present at the formal proof hearing, the outcome would have been any different. As a result, Mr Xiao cannot show either a miscarriage of justice or the risk thereof."
Xiao's disregard for the law was first uncovered in a Department of Internal Affairs (DIA) investigation, which began in 2015.
It uncovered more than 1500 transactions - totalling $105.4m - where Xiao had failed to meet anti-money laundering laws.
Xiao also failed in a bid last October to set aside his bankruptcy notice.
Companies Office records show Xiao remains the director and sole shareholder of Ping An, which operated out of a Queen St office and is currently in liquidation.