Ousted insurance head gets 18-year term

Wu Xiaohui, former chairman of Anbang Insurance Group, the Chinese insurer that owns the Waldorf Astoria New York hotel, has been sentenced to 18 years in prison for fraudulently raising $10 billion and embezzlement of corporate funds.

The sentence was announced on Thursday by Shanghai No 1 Intermediate Court. Wu, 51, also was deprived of his political rights for four years.

The court also ordered 10.5 billion yuan ($1.65 billion) of Wu’s property be confiscated.

The court found that Wu, between 2011 and 2017, misled investors so he could fraudulently raise 65.25 billion yuan and divert the money for his own use. The funds, raised by ignoring regulatory limits to oversell insurance products worth 724 billion yuan to 10.6 million investors, were transferred to companies he personally controlled for overseas investment, debt repayment and “personal squandering”.

To achieve the fraud, the court said Wu concealed his ownership of more than 100 companies, filed false statements with authorities and lured investors by promising higher returns than those offered by competitors.

Wu, who founded Anbang in 2004, also embezzled 10 billion yuan in premiums paid by policyholders, a violation of insurance regulations, to ensure the cash flow of his other companies, according to the court’s verdict.

The court said the ruling was made with consideration of the facts, nature, circumstances and harm to society.

Over 50 people, including Wu’s family, journalists and members of the public, attended Thursday’s public sentencing.

Wu was detained in June after a multibillion-dollar string of global acquisitions by the insurance and investment conglomerate prompted doubts about how it paid for its buying spree, including the $2 billion Waldorf Astoria purchase in 2015.

On Feb 23, Wu was removed as the group’s head when the country’s insurance regulator took control of the insurer to protect its solvency and consumer rights.

Anbang announced last month that the company was receiving a $9.6 billion bailout from a governmentrun fund, which would be able to purchase 98 percent of its equity.

An open trial of Wu’s case was held on March 28.

Wu contested all charges against him, but pleaded guilty in his final statement at the end of the trial.