Anbang and acquisition’s former owners lock horns in legal battle

Buyer alleges sellers did not disclose risks accompanying the deal, while sellers hit buyer for delayed payment

Anbang and acquisition’s former owners lock horns in legal battle

Insurance News

By Gabriel Olano

Anbang Group Holdings Co. has filed a countersuit against the previous owners of Tongyang Life Insurance, which complained about Anbang’s delayed payments for the 2015 transaction.

The countersuit alleged that Tongyang’s previous owners did not disclose risks that accompanied the purchase of the company, which was then the eighth-largest life insurer in South Korea. One such risk was Tongyang’s involvement in a meat importation loan scandal that cost it KRW380 billion (US$332 million).

One of the defendants, Yuanta Securities Korea Co., said in a regulatory notice that Anbang had sued it and four other Korean firms at the ICC International Court of Arbitration in Hong Kong, demanding KRW698 billion (US$612 million) in compensation.

In February 2015, Anbang obtained a 63.01% stake in Tongyang Life for KRW1.13 billion (US$987.5 million). In June, it was approved by the Financial Services Commission (FSC) as the company’s top shareholder. The deal was finalised in September, after the previous management was replaced by Anbang’s appointees.

In May 2017, VIG Partners and Yuanta Securities, two of Tongyang’s former owners, filed a case against Anbang with the ICC International Court of Arbitration for delays in payments. According to sources cited by Pulse News, the sellers and Anbang had agreed on instalment payments until the end of 2017, but Anbang was unable to pay the remaining amount of KRW40 billion (US$34.9 million) when the Chinese insurance giant was caught in Beijing’s crackdown on corruption in the financial sector.

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