4 April 2018Insurance

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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More on this story

Insurance
10 May 2018   The former chairman of China’s Anbang Insurance Group, Wu Xiaohui, has been found guilty of fraud and embezzlement and sentenced to 18 years in prison, according to a Reuters May 10 report.
Insurance
25 June 2018   The Chinese government has taken full ownership of troubled Anbang Insurance Group, according to a Wall Street Journal report citing a June 22 statement by the regulator.
Insurance
11 July 2018   Anbang Insurance Group is exploring the sale of Belgian insurer Fidea, Bloomberg News reported citing people “with knowledge of the matter”.