Wu Xiaohui, chairman of insurer Anbang, has been arrested, according to widespread reports, due to a crackdown on alleged corruption in the financial sector by the Chinese government. Reports of the arrest first appeared in the Chinese news magazine Caijing, although the Guardian newspaper said this report was then deleted which highlighted the sensitivity of the case.
The company issued a statement saying that Wu was temporarily unable to fulfil his role for personal reasons. The statement added: “He has authorized relevant senior executives to continue running the business, which is operating as normal.”
The Financial Times (FT) reported that the Chinese regulators have become concerned about the company’s risky reliance on life insurance policies to raise funds as well as an opaque corporate structure. Anbang had enjoyed rapid growth and had become known internationally for its acquisitions which included purchasing the Waldorf Astoria hotel in New York, spending $6.5bn on another 16 luxury hotels and buying South Korean and Dutch insurance companies. This also raised concerns among the Chinese authorities about the outflow of capital from the country and has since cracked down on this.
Anbang had already been targeted by the Chinese authorities having been banned recently from offering new products for “wreaking havoc on market order”. The FT reported that this had been already been damaging to the company even before the detention of the company chairman. Last month the FT also reported that Wu had been banned from travelling outside China.
The FT said: “Wu had billed himself as a self-made entrepreneur from Wenzhou, a freewheeling commercial city in Zhejiang province, investing in roads and China’s growing motor industry. He later married a granddaughter of Deng Xiaoping, China’s late paramount leader.”
Other reported targets of the Chinese government’s crackdown on the financial sector have been Xiang Junbo, chairman of the China Insurance Regulatory Commission, who was “suspected of severe disciplinary violations” and billionaire Xiao Jianhua who was abducted from Hong Kong by Chinese agents.Last Updated: 16 June 2017