Thu, Jun 15, 2017 - Page 11 News List

Anbang chairman detained, report says

PROBE?Anbang has been under scrutiny since a multibillion-dollar global string of asset purchases, including buying the Waldorf Astoria Hotel for US$2 billion

AP, BEIJING

Anbang Insurance Group Ltd chairman Wu Xiaohui attends the China Development Forum in Beijing on March 18.

Photo: Reuters

The Chinese insurer that owns New York’s Waldorf Astoria Hotel yesterday said its chairman was unable to perform his duties following a report he was detained by regulators amid accusations of possible financial misconduct.

Anbang Insurance Group Ltd (安邦保險集團) chairman Wu Xiaohui (吳小暉) was “temporarily unable to perform his duties due to personal reasons,” a one-sentence statement on the company’s Web site said.

It said Wu authorized other executives to do his work and gave no other details.

On Monday, influential financial magazine Caijing reported that Wu, who founded Anbang in 2004 and built it into one of China’s biggest insurers, was detained last week by insurance regulators.

Citing unidentified sources, it said authorities told the company about the detention, but gave no reason.

Anbang spokespeople did not respond to telephone calls or e-mails.

The China Insurance Regulatory Commission did not respond to questions sent by fax.

Anbang has been under scrutiny since a multibillion-dollar global string of asset purchases, including buying the Waldorf for US$2 billion, raised questions about how it was paying for its buying spree.

The privately held company said the money was raised from shareholders.

It denied accusations in April by another financial magazine, Caixin, that Anbang improperly used payments from policyholders to increase its capital base.

More recently, the company has suffered a series of setbacks, including failing to complete several foreign takeovers such as the proposed purchase of US-based Fidelity & Guaranty Life Insurance Co for US$1.6 billion.

Last month, Anbang was ordered to stop selling two financial products that regulators said violated industry rules.

Other Chinese insurers have also been investigated following complaints of reckless speculation on stocks and real estate.

The chairman of the Chinese insurance regulator is under investigation by the national anti-corruption agency.

Regulators have declared reduction of financial risks in the Chinese economy a priority this year.

Rising Chinese debt levels have prompted concern about the stability of the nation’s financial system.

Anbang has a reputation for unusually aggressive expansion in a Chinese insurance industry dominated by state-owned companies.

Earlier, the company discussed possibly investing in a Manhattan skyscraper owned by the family of Jared Kushner, US President Donald Trump’s son-in-law and adviser. Those talks ended in March without a deal.

Anbang said it raised 50 billion yuan (US$7.36 billion at the current exchange rate) from investors in 2014 to pay for its buying spree.

That increased its registered capital fivefold to 62 billion yuan, the biggest among Chinese insurance companies.

Caixin’s April report said at least 30 billion yuan of that money was actually payments from policyholders.

The magazine said the money was then channeled back into the company through a complex ownership structure.

Anbang has more than 30,000 employees serving 35 million clients, and has interests in life insurance, banking, asset management, leasing and brokerage services.

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