China to inject $9.7bn into troubled Anbang
SHANGHAI: Anbang Insurance Group said on Wednesday that China’s government will inject 60.8 billion yuan ($9.7 billion) into the troubled conglomerate, whose rapid acquisition binge triggered a takeover by regulators worried about the firm’s solvency.
China’s insurance regulator announced an unprecedented commandeering of Anbang in February, and a Shanghai court last week accused former chairman Wu Xiaohui of defrauding the company of more than $10 billion. No verdict has been announced yet. The government’s swoop on Anbang was its most aggressive move yet to rein in big politicallyconnected private conglomerates that grew rapidly, often fuelled by massive debt, and spent lavishly on overseas acquisitions.
The cash infusion, which will raise Anbang’s registered capital to 61.9 billion yuan, will come from a fund established by China’s insurance regulator to oversee the company’s management.
“The capital injection will be supportive of strengthening Anbang’s risk management, ensuring ample liquidity and maintaining the stability of its operations,” a notice on Anbang’s website said.
The takeover is due to last a year but the government has said it could be extended if necessary as authorities work to restructure Anbang.
Anbang will begin “to select strategic shareholders in the near future” to bring in further funding, the company notice said.
The government has said Anbang will remain a private company.
Beijing-based Anbang used massive sales of short-term, highyield policies to become one of China’s biggest insurers, but regulators are now believed to fear the company had hugely overextended.