FILE PHOTO: The headquarters building of Anbang Insurance Group is pictured in Beijing, China, August 25, 2016. REUTERS/Jason Lee/File Photo
March 28, 2018
SHANGHAI/BEIJING (Reuters) – The trial of the former chairman of Anbang Insurance Group Co Ltd [ANBANG.UL] Wu Xiaohui for alleged economic crimes started in Shanghai on Wednesday, a court statement said.
The case comes a month after the Chinese government officially seized control of the once-high flying insurer and announced that Wu was being prosecuted, as Beijing cracks down on big-spending conglomerates and financial risk.
Anbang had been one of the most aggressive investors behind a wave of overseas acquisitions by Chinese firms that have attracted the attention of global regulators and investors.
The downfall of Anbang, which got its start as an auto insurer, came after the government trained its sights on acquisitive non-state firms amid a sweeping program to lower debt and financial risk in the economy.
Anbang declined to comment on the start of the trial at the Shanghai No. 1 Intermediate People’s Court.
The court said parliamentarians, journalists and others, including family members of Wu, attended the hearing.
Wu, known for his hard-driving, hands-on approach and single-minded ambition, was detained in June, sources have said.
After a spate of high-profile deals worth more than $30 billion, Anbang began to run into roadblocks even before Wu’s detention, though, failing to close on a handful of investments and facing criticism over its opaque shareholding structure.
Private conglomerates in China have recently attracted regulatory attention for their aggressive acquisitions of overseas assets. Some insurers were punished for using client money derived from high-yield investment products sold to consumers for risky investments. This has particularly jarred with authorities concerned about an economy over-reliant on credit.
(Reporting by Josephine Mason, Fang Cheng and Matthew Miller in Beijing and John Ruwitch in Shanghai; Editing by Michael Perry and Jacqueline Wong)
