Anbang Chairman’s Mysterious Absence Adds to Months of Intrigue – Bloomberg
But on Wednesday, with scant explanation, Wu Xiaohui was said to be unable to perform his duties as chairman of Anbang Insurance Group Co. In a terse statement sent to reporters around 2 a.m. Beijing time, Anbang said only that Wu — who had spent more than a decade transforming the company into a global juggernaut — was no longer able to serve in his post because of personal reasons. Other senior executives will carry out his responsibilities, the Beijing-based company said.
The development added another layer of intrigue to the story of Anbang, whose overseas acquisition spree has slowed in recent months amid increased scrutiny at home and abroad. China’s central bank was said to look into suspected breaches of anti-money laundering rules at the insurer late last year, while authorities temporarily banned Anbang’s life insurance unit from selling new products in May. High-profile bids for American hotels, insurance assets and a Manhattan office tower owned by the family of U.S. presidential adviser Jared Kushner have all fallen through over the past 18 months.
‘No Longer Viable’
“It looks very unlikely that Anbang will be able to continue its overseas
buying spree,” said Grace Zhou, a Hong Kong-based analyst at ICBC
International. “Its business model is no longer viable given tightened
regulatory scrutiny,” Zhou said, adding that the latest shock to the firm’s reputation could drive policy surrenders and make it harder for Anbang to tap international financing.
The exact nature of Wu’s role in any government investigation has become the subject of widespread speculation. Before Anbang’s statement, Caijing Magazine, citing unidentified sources, reported that Wu had been taken away by Chinese authorities on June 9. The article, which said it was unclear whether Wu was assisting with a government investigation, was later deleted from the magazine’s website.
Caijing didn’t answer calls and emails requesting comment, while Anbang referred to its statement when asked to comment on the Caijing report. The company on June 2 denied a Financial Times report that said Wu was barred by Chinese authorities from leaving the country.
Read more: A QuickTake Q&A on Anbang
It wouldn’t be the first time a Chinese tycoon has allegedly fallen afoul of Chinese authorities. Prominent financier Xiao Jianhua was taken by agents from a Hong Kong hotel earlier this year and presumed to have been brought back to China, according to local media reports. Executives of a company controlled by tycoon Guo Wengui stood trial this month on charges of loan and foreign exchange fraud, the state-owned Xinhua News Agency reported, after Chinese authorities issued a request to Interpol for Guo’s arrest in April.
Anbang’s story begins in 2004, when it was founded as a property-and casualty-insurer selling auto policies. While the firm was little-known to the wider world back then, Anbang had some powerful backers inside China. The company’s early shareholders included state-owned behemoths SAIC Motor Corp. and China Petroleum & Chemical Corp., known as Sinopec.
Anbang added a life unit in 2010 and turbocharged its expansion in 2014 by selling single-premium, high-yield policies — many of which could be redeemed in two years at a profit. With names like Anbang Longevity Sure Win No. 1, the products offered returns well above benchmark deposit rates and have proven popular with mom-and-pop investors. Anbang now has almost 2 trillion yuan ($294 billion) of assets and more than 30,000 employees, according to its website.
Wu first turned heads outside China when Anbang offered to buy New York’s iconic Waldorf Astoria hotel in October 2014. Chinese media likened his approach — using insurance income to fund wider ambitions — to the model honed by Berkshire Hathaway Inc.’s Warren Buffett. The Waldorf acquisition was followed in short order by bids for six luxury resorts in the U.S., including the landmark Hotel del Coronado near San Diego, California. Anbang’s targets have also included the Belgian banking operations of Delta Lloyd NV, South Korean insurer Tongyan Life Insurance Co. and Starwood Hotels & Resorts Worldwide Inc.