It was reported earlier today on Chinese social media that the chairman of Anbang Insurance Group, Wu Xiaohui, was detained by authorities in Beijing on allegations of illegal loans and several other offences. However, these reports have since been denied.
The reports said that the government had stopped all of the insurance group’s overseas investment deals. However, after the story broke worldwide, Anbang Insurance reached out to Insurance Business with the following statement:
“There is no validity to the unfounded rumors that any Anbang executives, including Chairman Wu, have been detained by authorities,” said the spokesperson. “There has been no interruption to Anbang’s business activities, both foreign and domestic, which continue as usual.”
Wu is the husband of the granddaughter of former Chinese leader Deng Xiaoping. His alleged detention came 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 reported arrest was also thought to 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.
Want the latest insurance industry news first? Sign up for our completely free newsletter service now
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.
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.
China M&A activity grows amid evolving regulatory and policy environment
Aussie insurer: business as usual after 2017 Chinese buyout