Chairman Wu Xiaohui Arrested on Corruption Charges
Management Rights Disintegrate After Transfer to Chinese Authorities
Chinese authorities have approved bankruptcy proceedings for Anbang Insurance, which once had assets worth 2 trillion yuan (approximately 380 trillion won).
According to Chinese media such as Caixin on the 3rd, the National Financial Regulatory Administration, which oversees the financial sector in China, recently announced this on its official website.
Anbang Insurance is a private financial group founded in 2004 by Wu Xiaohui (吳小暉), the grandson-in-law of Deng Xiaoping (鄧小平). There were rumors that Chen Xiaolu (陳小魯), the son of Chen Yi (陳毅), a revolutionary hero of the People's Republic of China, was the actual owner or a business partner of former chairman Wu.
Former chairman Wu rapidly expanded the business by leveraging his 'guanxi' (關係, relationships) with China's top officials. At one point, Anbang Insurance's total assets reached 2 trillion yuan, an exceptional case of success in China's financial sector for a private company.
The company also pursued aggressive overseas management, acquiring major financial firms in key countries, including Dongyang Life Insurance and the former Allianz Life Insurance (now ABL Life Insurance) in South Korea.
However, Anbang Insurance's success story ended when Wu Xiaohui was arrested by authorities in 2017 on corruption charges.
Wu was sentenced to 18 years in prison for embezzling 65.248 billion yuan and had personal assets worth 10.5 billion yuan confiscated. Control of Anbang Insurance was taken over by Chinese authorities.
At the time, there were analyses that the strong crackdown on Anbang Insurance was a preemptive measure to resolve financial risks, while some interpreted that President Xi Jinping (習近平) dismantled Anbang Insurance to curb the influence of the princelings (太子黨, the children of revolutionary elders) excluding himself.
Meanwhile, two subsidiaries of Evergrande Auto (Hengda Auto), a major affiliate of China's mega real estate developer Evergrande (Hengda), which is facing an existential crisis amid financial difficulties, have also entered bankruptcy and court administration procedures.
The Hong Kong High Court ordered the legal liquidation of Evergrande on January 29, but Chinese courts have yet to accept the legal liquidation process for Evergrande.
However, on June 11, Hengda Auto was ordered by Chinese authorities to halt production and sales, and was also instructed to return subsidies received from local governments.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
