You are here
China trying to broker sale of stake in insurer Anbang: sources
[BEIJING] China's government, which has been probing alleged financial wrongdoing at Anbang Insurance Group, is seeking to broker the sale of a stake in the insurer, people with knowledge of the matter said.
Central Huijin Investment, a unit of China's sovereign wealth fund, has held preliminary discussions about buying a stake in Anbang, although failed to reach any agreement, said the people. It wasn't clear what the potential size of any stake sale would be, or who the selling shareholders are. The people asked not to be named because the deliberations are private.
Anbang chairman Wu Xiaohui was detained by the authorities in June, throwing the acquisitive insurer into disarray. A working team that included China's insurance regulator was subsequently dispatched to Anbang to oversee the company's operations and ensure its stability, according to the people. Representatives from the police and the Central Commission for Discipline Inspection have also been involved in investigating Anbang, the people said.
While Anbang burst onto the global scene with a string of high-profile acquisitions including New York's Waldorf Astoria hotel, details around its ownership are shrouded in secrecy. The firm in 2016 withdrew an application to acquire a US insurer amid reports that New York regulators had reservations about Anbang's ownership structure.
An Anbang representative declined to comment. Representatives at sovereign wealth fund China Investment Corp and the China Insurance Regulatory Commission (CIRC) didn't immediately respond to requests seeking comment.
Anbang is controlled by a group of companies owned by about 100 people with ties to Mr Wu, many of them hailing from his home county of Pingyang on the eastern Chinese coast, The New York Times reported in 2016. At least 35 of Anbang's corporate shareholders can trace all or part of their ownership to relatives of Mr Wu or his wife, according to the report. A company official disputed that report at the time, without providing details.
President Xi Jinping and his top economic deputies have vowed to make controlling financial risks their priority, a pledge renewed at the Communist Party's twice-a-decade leadership congress last year. China's insurance regulator, along with the main banking watchdog, have announced a flurry of rules since last year to contain financial risks in the system.
According to a plan by the CIRC to resolve risks in the insurance industry, published Jan 17 on its website, its "regulatory teams" would be in charge of formulating risk-disposal plans to "resolve risks at a few problem companies in an orderly and controllable manner" in three years, to prevent individual and regional risks from developing into systemic risks.