Wu Xiaohui, who was removed as chairman of Anbang Insurance Group on 23 February, appeared at the Intermediate People’s Court in Shanghai on 28 March, according to local newspaper South China Morning Post.
The trial follows the Chinese Insurance Regulatory Commission (Circ) seizing control of Anbang on the same date Wu was removed from his post.
Alleged corruption
According to the court; Anbang, under Wu’s direction, raised capital through selling wealth management insurance policies to 105.6 million clients.
In doing so, it exceeded the regulator’s approved quota by RMB723.5bn (£81.3bn, €92.8bn, $115bn).
In addition to this, an estimated RMB65.3bn of funds were allegedly diverted to Wu’s personal accounts. These funds were allegedly used for paying debts and personal spending.
Further, an additional RMB10bn of insurance premiums were alleged to have been transferred to Wu’s personal company between 2007 and 2011.
Ignorance of the law
Wu defended his actions at the trial saying he objected to the facts cited. He said he did not understand Chinese law and that he did not know that his actions were criminal.
He acknowledged receiving a regulatory notice from Circ about exceeding the approved quota but disputed that Anbang had breached it.
Regulatory crackdown
Circ seized control of Anbang as part of a series of investigation into alleged corruption by a handful of China’s biggest overseas asset buyers.
As a result of one of its probes, Wu was forced to hand over control of the company in June 2017. A move the insurer said was “for personal reasons”.
The following month, the firm was instructed to sell its foreign assets, although Circ later denied it was putting any pressure on the firm.
Anbang is a holding company for subsidiaries that deal primarily with insurance, banking and financial services.
Among its overseas assets, Anbang owns Dutch insurer Vivat and South Korea’s Tongyang Life.
In April 2016, the group also acquired Allianz’s South Korea operations.
Other holdings include the Waldorf Astoria New York hotel plus a further 16 landmark US hotels.
