28 March 2018Insurance

Anbang former chairman charged with $10.5bn fraud

The former chairman of Anbang Insurance Group, Wu Xiaohui, is being accused by a Shanghai court of masterminding a ¥65.2 billion ($10.4 billion) fraud, using unauthorised sales of investment-type policies to prop up the acquisitive company’s capital, according to a March 28 Bloomberg News report.

Wu allegedly ordered up fraudulent financial statements and used money raised from fraud for investment, debt repayment and personal use, the Shanghai No. 1 Intermediate People’s Court reportedly said in a Weibo statement.

Wu was arrested in June, 2017 as troubles mounted for one of China’s most aggressive buyers of overseas assets. The Chinese government seized control of Anbang in February 2018.

Anbang attracted international attention when it acquired the Waldorf Astoria hotel in New York in 2014. Much of Anbang’s growth was driven by sales of short-term, high-yield products that the company used to fund purchases of long-term assets such as real estate -- a duration mismatch that had long worried analysts and regulators, according to Bloomberg.

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More on this story

4 April 2018   After China took control of Anbang Insurance Group, the China Banking Insurance Regulatory Commission has approved a plan to inject ¥60.804 billion ($9.65 billion) of capital into the company while seeking new investors.
17 April 2018   The former chairman of China Insurance Regulatory Commission (CIRC) Xiang Junbo has been formally charged on suspicion of taking bribes, Reuters reported on April 16.
19 April 2018   Wang Yincheng, former president of the state-owned People's Insurance Company of China (PICC), has pleaded guilty in a trial on the charge of accepting bribes, according to an April 16 report by the country’s official press agency Xinhua.