Chinese court sentences Anbang founder to 18 years in jail for fraud
A Shanghai court sentenced Anbang founder Wu Xiaohui to 18 years in jail for fraud and abuse of power, sealing his fate, but leaving the future of billions of dollars in B.C. assets owned by the Beijingbased insurance group in limbo.
Anbang controls a string of hotels, property and other assets around the world, including downtown Vancouver office towers and B.C.’s largest seniors’ care company.
In 2016, Anbang ’s wholly owned Vancouver-based Maple Tree Financial Investment Canada bought the Bentall Centre office tower and retail mall in downtown Vancouver for over $1 billion.
Last year, the federal government approved an Anbang deal via another wholly owned Vancouver-based company, Cedar Tree Investment Canada, to buy Retirement Concepts, a Vancouver-based seniors’ care company with real estate holdings across B.C., also for more than $1 billion.
These Anbang acquisitions followed the company’s snapping up of trophy assets such as the Waldorf Astoria New York for almost US$2 billion and a chain of luxury, U.S. hotel properties, all despite growing worries about its opaque ownership structure.
Now, Anbang is being held on a tight leash by the Chinese government’s insurance regulator and other officials.
In late February, Beijing seized Anbang ’s assets and said it would control them for a year. It later injected almost US$10 billion in capital to keep the company solvent, stable and ultimately owned by a new set of shareholders.
In late March, Wu stood before a one-day trial to face allegations of fraud and embezzlement.
Prosecutors said he tried to mask how he controlled Anbang and duped small investors by posing as an insurer, but selling short-term, high-yield investment products.
A court summary also revealed some evocative tidbits with allegations that Wu instructed Anbang employees to flee overseas and change their contact information when the Chinese government started investigating their company last year, according to the New York Times.
Wu contested some charges in March, but pleaded guilty and asked for leniency.
In addition to meting out an 18year prison sentence, the Shanghai court said it will confiscate US$1.65 billion in assets from Wu.
This week, an Anbang spokesperson quoted by the Wall Street Journal said “the firm has no plans to shed overseas assets, but the company has been speaking with bankers after the government takeover so they can have a ‘better understanding of the situation of the value’ of the holdings.”