Screw tightens on China Inc after Anbang's mess

Shanghai

BEIJING'S unprecedented takeover of private insurer Anbang confirms that toxic risks lurk in the world's second-largest economy while signalling the state's tightening grip on China Inc despite reform rhetoric, analysts said.

Government regulators seized control of Anbang Insurance Group on Friday, saying its debt-fuelled foreign acquisition binge left the company in financial peril and that high-flying founder and former chairman Wu Xiaohui would be prosecuted for fraud. The takeover, to last at least a year, was the most striking step yet by regulators to rein in dizzying debt levels and a clear sign that the government saw something frightening in Anbang's books.