Anbang Insurance gets US$10 billion rescue bailout from Beijing after ex-chair Wu Xiaohui admits fraud
The cash injection follows ex-chairman Wu Xiaohui’s guilty plea to charges of fundraising fraud and embezzlement last week
China will inject 60.8 billion yuan (US$9.7 billion) into the beleaguered Anbang Insurance Group to ensure its solvency after ex-chairman Wu Xiaohui admitted fundraising fraud and embezzlement involving more than US$10 billion.
The injection of cash from the government-run Insurance Protection Fund will take Anbang’s registered capital to 61.9 billion yuan, the China Banking and Insurance Regulatory Commission (CBIRC) said in a statement on Wednesday.
Anbang, one of China’s largest insurers, claims on its website that it controls almost 2 trillion yuan of assets. The company is known for its aggressive global expansion, including the almost US$2 billion acquisition of New York’s Waldorf Astoria hotel in 2014.
In February the Chinese government seized control of Anbang after Wu was detained for alleged economic crimes, marking one of Beijing’s most dramatic moves in its clampdown on financial risks stemming from excessive borrowing.
Last week Wu asked for leniency in court in Shanghai as he pleaded guilty to charges of “fraudulent fundraising” and “work-related embezzlement”. Prosecutors had previously accused him of defrauding investors of 65.3 billion yuan (US$10.4 billion), making his trial one of China’s biggest related to financial crimes.
