China’s Anbang Insurance boss seeks leniency in fraud case
Former chairman Wu Xiaohui accused of defrauding billions
Wu Xiaohui, former chairman of China’s giant insurer Anbang, has expressed remorse and sought leniency at the end of his trial for alleged fraud of $10.4 billion (€8.45 billion).
Mr Wu is one of the country’s best-known dealmakers, a politically connected investor whose aggressive drive to buy overseas assets has come to embody the hubris of China’s heavily indebted conglomerates.
Earlier in the proceedings at Shanghai’s No 1 Intermediate People’s Court, Mr Wu contested the charges but in his closing statement at the end of the one-day trial he expressed remorse and begged for leniency. Chinese courts only rarely find defendants not guilty and he could face at least 10 years in jail.
Mr Wu had “expressed deep self-reflection, understanding of and regret for the crimes, and expressed deep remorse for his actions” according to a transcript of the court proceedings.
Prosecutors said Mr Wu had concealed his control over Anbang and faked financial statements to cheat regulators for approvals to sell insurance products to the public for investment.
The government accused Anbang of overselling 724 billion yuan (€94 billion) of investment-purpose insurance products, and transferring some of the funds to his other companies for investment, debt repayment and personal spending over a six-year period.
During the case, MrWu said he did not understand the law and did not know that his behaviour amounted to a crime.
Mr Wu’s political connections are legendary and he is reportedly married to a granddaughter of the architect of Chinese economic reform, Deng Xiaoping. He is the first executive to publicly go on trial amid a broader crackdown on financial risk that has seen the country’s massive conglomerates, including HNA, Fosun and Wanda, reined in over a surge in multibillion-dollar investments overseas in everything from football clubs to film studios.
Last month, the government seized control of Anbang, which owns New York’s Waldorf Astoria hotel.
Anbang has almost two trillion yuan (€258 billion) in assets and owns businesses spanning insurance, asset management, financial leasing and banking.
Since being taken over on February 23rd, the government will run the company for a year, with officials from the China Insurance Regulatory Commission, the central bank and other key financial regulators and government bodies responsible for its management.
Other senior executives are currently under investigation as the authorities crack down on excessive leverage.
Xiao Jianhua, of the Tomorrow Holding Company, was detained early last year, while CEFC China Energy’s founder and chairman Ye Jianming is reportedly under investigation by authorities.