Insurer Anbang’s ex-boss jailed 18 years for fraud

SHANGHAI: A Chinese court jailed the former high-flying head of troubled Anbang Insurance Group for 18 years for defrauding the company of more than US$10bil (RM39.9bil).

Wu Xiaohui (pic) was toppled as Anbang’s head last year and China’s insurance regulator announced an unprecedented takeover of the conglomerate in February, as the government moves to prevent heavily-indebted large private companies from collapsing and posing a risk to the financial system.

Established in 2004, Anbang grew rapidly into a financial- services powerhouse, making waves in 2014 by buying New York’s landmark Waldorf Astoria hotel for US $1.95 bil (RM7.8bil) and other acquisitions.

In addition to the prison sentence, the Shanghai Municipal No. 1 Intermediate People’s Court announced that it had ordered the seizure of 10.5bil yuan (RM6.5bil) worth of his property and the suspension of his political rights for four years.

The court yesterday found him guilty of defrauding Anbang of more than 65bil yuan (RM40.7bil) following a trial in March.

The funds were transferred to companies that Wu personally controlled to repay debts or for “personal expenditures”, the judges said.

Between 2011 and 2017, Wu instructed others to produce false earnings reports, disclose false information, fake fund injections and conceal insurance revenue to deceive regulators, the court said.

“(Wu) used bait by promising interest rates higher than the bank depository rate to illegally absorb large amounts of funds, which exceeded the scale the former insurance regulator approved,” it said.

At his March trial, the court was also told that Anbang had sold investment products that exceeded allowable fund-raising amounts by a whopping 723.9bil yuan (RM453.9bil).

The government’s swoop on Anbang marked its most aggressive step yet to rein in politically connected conglomerates that grew rapidly and launched a wave of splashy multibillion-dollar overseas investments fuelled by excessive debt.

The government of President Xi Jinping, who has dramatically strengthened his grip on power recently, has made cleaning up financial risks a top national priority. — AFP