The chairman of Anbang Insurance Group, Wu Xiaohui, has reportedly been detained by authorities in Beijing on allegations of illegal loans and several other offences, according to reports that have spread on Chinese social media.
The reports also say that the government has stopped all of the insurance group’s overseas investment deals.
Wu was the husband of the granddaughter of former Chinese leader Deng Xiaoping. His detention allegedly comes after an investigation involving loans worth hundreds of billions of yuan which were suspected to come from illegal means. These loans were also reportedly used to invest in the stock market, as well as to conduct shady asset transfers overseas.
The arrest may be connected to the Chinese government’s drive to eliminate corruption in the financial and business sectors. Earlier this month, Xiang Junbo, chairman of the China Insurance Regulatory Commission, was investigated and later dismissed for violating anti-graft regulations.
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Anbang was a little-known insurer in China a few years ago, but it gained notoriety after it launched a massive asset shopping spree, including the 2014 purchase of the Waldorf Astoria Hotel in New York for US$1.95 billion. It also acquired stakes in several domestic banks including China Minsheng Bank and China Merchants Bank; and made a high profile investment in Canada with its swoop for a BC retirement home.
It has also had its share of failed high-profile deals, such as the plan to acquire Starwood Hotels & Resorts portfolio, which Anbang backed out of at the last minute. It was in negotiations to redevelop an office tower at 666 Fifth Avenue in New York, but the building’s owner, Kushner Company, recently said that it had cancelled talks with Anbang.
Anbang also planned to acquire US-based life insurer Fidelity & Guaranty Life for US$1.6 billion but it failed to obtain the regulatory approvals.
Last month, it was reported that Wu and Zhuo Ran, Deng Xiaoping’s granddaughter, have divorced. It was said that the Deng family had ill regard for Wu, and Zhuo has cut off her connections with Anbang.
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