China takes control of Anbang Insurance, chairman prosecuted: Reuters

The Chinese government seized control of Anbang Insurance Group and said its chairman had been prosecuted, according to a Reuters Feb. 23 report.

The move illustrates Beijing’s willingness to curtail big-spending conglomerates as it cracks down on financial risk, the report said.

Anbang had violated laws and regulations which “may seriously endanger the solvency of the company”, the China Insurance Regulatory Commission (CIRC) said in a statement announcing the seizure, without giving details.

The CIRC also said Anbang’s chairman and key shareholder, Wu Xiaohui, had been prosecuted for economic crimes. Wu was arrested in June as troubles mounted for one of China’s most aggressive buyers of overseas assets.

The Shanghai prosecutors’ office said in a statement that Wu had recently been charged with fundraising fraud and abuse of his position, and that his case had been forwarded to the city’s intermediate court for prosecution.

During the government takeover of Anbang Group, which will last for one year starting from Friday, the company will be managed by a group of officials from the CIRC, the central bank and other key financial regulators and government bodies.

The group will seek to undertake an equity restructuring of the insurance giant, even as it keeps Anbang operating as usual, protecting the rights and interests of its consumers and stakeholders, the CIRC said.

The takeover of Anbang, which claims 1.97 trillion yuan (£222.37 billion) in assets and ranks 139 on the Global Fortune 500 list, is a defining blow to a conglomerate best known for acquiring New York’s landmark Waldorf Astoria hotel, the report said.

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