China to inject $9.65bn in Anbang

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.

In February 2018, the Chinese government seized control of Anbang in an attempt to curtail big-spending conglomerates as it cracks down on financial risk.

Anbang had violated laws and regulations which “may seriously endanger the solvency of the company”, the China Insurance Regulatory Commission (CIRC) has said in a statement announcing the seizure.

Meanwhile, the company’s former chairman Wu Xiaohui is reportedly 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.

The planned capital injection will be made through non-governmental industrial fund China Insurance Security Fund (CISF) and will be supportive of strengthening Anbang’s risk management, ensuring ample liquidity and maintaining the stability of its operations, according to a statement. Anbang’s registered capital will reach ¥61.9 billion following the capital injection by CISF.

CISF will temporarily hold shares in Anbang during this phase of Anbang’s interim management and will gradually transfer its shares in Anbang in accordance with the company’s strategic transition in order to maintain Anbang’s status as a private company.

Anbang will officially start to select strategic shareholders in the near future to actively introduce large-scale private investors. The company will particularly seek investments from private companies in the area of pension insurance, healthcare, internet and technology, and those that share synergic resources with its core insurance business.

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