B.C. assets included in Beijing takeover of Anbang group
The Chinese government’s dramatic takeover of Anbang Insurance Group, citing concerns about the Beijing-based company ’s ability to pay its debts and the fraudulent conduct of its former chairman, puts into question the future of the international investments it has made in recent years.
These include some billiondollar deals in Vancouver that, while small on the world stage, are among the largest and most controversial in B.C.’s recent past.
They drew attention not only for their dollar amounts, but also criticism for the speed at which they were sealed, considering how little information could be confirmed about Anbang ’s opaque ownership.
In 2016, Anbang spent more than $1 billion to purchase the Bentall Centre office towers and mall in downtown Vancouver. In 2017, it completed a more-than-$1-billion purchase of Vancouver-based Retirement Concepts, B.C.’s biggest provider of seniors’ care. Anbang is also believed to own the Fairmont Vancouver airport hotel, which it bought from Toronto-based InnVest for $90 million in 2016.
Executives at the downtown Vancouver offices of Anbang ’s Canadian investment vehicle, Maple Tree Financial Investment Canada Inc., refused to answer questions Friday morning, directing them to the company official in Hong Kong.
Overnight, that office had already been handling queries from international media that posted a flurry of headlines, noting how some high-profile properties and projects owned by Anbang — such as the continuing pricey renovation of the Waldorf Astoria hotel in New York City — are effectively now under direct Chinese government control.
This followed a statement from China’s insurance regulator, explaining that it has appointed an interim working group of central bank officials and other financial regulators to take over Anbang ’s board and management for a year, because “there exist illegal operations at Anbang, posing threats to the company’s solvency” and its ability to pay its debts.
This group will keep Anbang a private company, but “undertake an equity restructuring ” and keep operations running as usual, according to the statement, which didn’t give other details, but also said Anbang’s chairman, Wu Xiaohui, had been dismissed and charged with “economic crimes” including fundraising fraud and abuse of his position.
It was Wu who had raised eyebrows with his connections to modern China’s founding families, freewheeling style and penchant for splashy bids, the most famous being an almost $14-billion offer to buy Starwood Hotels in 2016, which Anbang later abandoned.
Anbang later bought other hotels run by Strategic Hotels and Resorts, including the Four Seasons in Washington, D.C., and JW Marriott in New York. The company also owns prominent hotels in London and Paris, and has notable stakes in some South Korean and Dutch insurance companies.
Wu had been sidelined since June 2017 when he was arrested.
Ottawa approved Anbang’s purchase of Vancouver-based Retirement Concepts a few months before that, in February 2017, but there were already many questions being asked then about American and European deals falling apart because basic information about Anbang couldn’t be answered. Officials in Ottawa who, according to guidelines about approving foreign investment, would have also needed to know such details, have never commented.
“It’s clear that there were warning signs that were ignored about what we knew and what we didn’t know,” said Don Davies, Vancouver-Kingsway MP and the NDP federal health critic, adding that Retirement Concepts, which operates almost 25 facilities for seniors in B.C., gets tens of millions of dollars a year from the provincial health-care system.
“The feds were rash and dismissive when we were asking for explanations and we never got satisfactory answers from the government,” said Davies.
For now, analysts aren’t sure what the changes will mean for assets owned by Anbang. They can only speculate at the economic and political forces that may be at play in Beijing, and how that will determine whether Anbang sells off its investments or shifts control to a whole new set of shareholders.
“This temporary change in management at Anbang will not impact the operations, staff or residents,” Retirement Concepts said in a statement .“An bang will remain a private, independent company and its business and operations are stable. Retirement Concepts communities are provincially regulated and we are required to report monthly to ensure we meet the highest standards to residents and this will not change. There will be no change to our Retirement Concepts team or our day-to-day operations.”