China's government swooped in on a high-profile insurer that made landmark acquisitions across the globe. What of its politically connected founder?
Chinese officials removed the founder and chairman of finance conglomerate Anbang, Wu Xiaohui, according to media reports on Friday. He faces prosecution for alleged company embezzlement, a further sign that China is moving to insulate itself from the at times perilous financial dealings of its acquisition-hungry conglomerates.
Wu was first detained for questioning by Chinese authorities last June, while regulators worked to curb the policies fueling the company's growth. Anbang drew unwanted attention last year for a planned, then abandoned, investment into a firm controlled by the family of Jared Kushner, the son-in-law of and senior advisor to U.S. President Donald Trump.
Warning Shot
Together with conglomerates Wanda and HNA Group, Anbang delighted in acquiring landmark overseas investments in recent years, including the $1.95 billion acquisition of New York's Waldorf Astoria luxury hotel. The insurer also bought life insurers in the Netherlands, South Korea, and the U.S.
With Beijing tightening controls over money leaving the country, debt-laden HNA recently pared back its stake in Germany's Deutsche Bank – the second time it has done so within a week. Meanwhile, Dalian Wanda Group, another weighty Chinese investor, offloaded most of its 20 per cent stake in Spanish soccer club Atletico Madrid.
Wu enjoyed political credibility until his downfall: he is married to a granddaughter of former leader Deng Xiaoping.
