Chinese insurer threatens legal action against 'NYT'


China’s second-biggest insurance company, Ping An, has threatened to take legal action against the New York Times after it published a story saying Chinese premier Wen Jiabao’s relatives had accumulated massive wealth, largely through holdings in the firm.

In a written statement yesterday, Ping An “noted recent media coverage related to the company, which contains serious inaccuracies, facts being distorted and taken out of context, as well as flawed logic”, and said it would “take appropriate legal action commensurate with the damage and adverse impact the media reports have caused to the company”.

The New York Times report said a company controlled by Mr Wen’s relatives acquired shares in Ping An after an appeal by the insurance giant to authorities in 1999 averted a break-up.

Ping An had been facing insolvency in the late 1990s after the Asian financial crisis, but was granted a waiver from a rule that would have forced the company to be broken up, after a request from the group’s chairman, Ma Mingzhe. He had written to the then-vice premier, Mr Wen, in September 1999 with details of the insurer’s financial performance.

After Ping An was granted the waiver, Taihong, a company that would later be controlled by Mr Wen’s relatives, bought shares in Ping An in December 2002 for about a quarter of the price paid by HSBC Holdings two months later, it said. By 2007, the $65 million (€50 million) investment by Taihong was worth $3.7 billion, and the relatives’ stake of that investment probably peaked at $2.2 billion, according to the newspaper.

The claims are contained in the latest report about the finances of the premier in the New York Times. The newspaper cites corporate filings and copies of letters and records as the sources for the story.

The New York Times said it was not known if Mr Wen intervened on behalf of Ping An’s request for the waiver, or if he was aware of the stakes held by his relatives. The paper insisted it had found no indication any law was broken, no evidence Mr Wen held Ping An shares under his name, nor any indication he shared inside information with family members.

However, the story is an embarrassment for the government and is sure to further rile the Chinese authorities, who denied the first part of the report last month, which exposed links between Mr Wen’s family, including his wife, and various lobby groups and companies.

Since its initial report on the wealth of Mr Wen’s family in late October, the newspaper’s English- and Chinese-language websites have been blocked in China.

The Bloomberg news website has also been blocked in China since it reported in June that the extended family of Chinese president-designate Xi Jinping had investments in companies with assets of €290 million.