How quickly the mighty can fall in China.
Last November, Wu Xiaohui, the chairman of Chinese financial giant Anbang Insurance Group, was having dinner at New York’s Waldorf Astoria hotel, which Anbang owns, with Jared Kushner. Kushner’s father-in-law had just been elected president of the United States. A property deal worth hundreds of millions of dollars was under discussion, according to the New York Times. This week, Chinese media reported late Tuesday that the insurance mogul had been detained by Chinese authorities.
In a June 13 statement, the Beijing-based Anbang Insurance Group said that Wu “is currently unable to fulfill his role for personal reasons. He has authorized relevant senior executives to continue running the business, which is operating as normal.” A company representative said Anbang couldn’t comment further. The business magazine Caijing reported that Wu was detained on Friday in China’s capital, but the piece was later taken down.
In recent years, the privately held Anbang, founded in 2004 and now a company with some 30,000 employees, often created headlines for its ambitious forays overseas. That very ambition may have led to Wu’s downfall, despite his connections, which include a marriage to a grand-daughter of Deng Xiaoping, by drawing ever-increasing attention to the group’s financial structure, and its reluctance to answer questions over it.
Last year Anbang walked away from a roughly $14 billion acquisition of Starwood Hotels & Resorts, a move many attributed to its being pressed to disclose more details to allow the hotel chain to better evaluate the offer. In March, Kushner Companies said it had ended talks with Anbang over its Manhattan property. Another deal, to acquire US insurer Fidelity & Guaranty Life, collapsed in April after Anbang didn’t satisfy financial queries from state regulators.
At the end of April, financial publisher Caixin Media released an extensive report on Anbang, describing “complicated transactions that form a maze of capital flow involving more than 100 companies, all linked to the company’s mysterious Chairman Wu Xiaohui.” It also noted that Anbang’s capital and assets had ballooned despite the relatively low market share of its insurance products, citing figures from China’s insurance regulator. Anbang responded by accusing Caixin of issuing “libelous reports” after failing to get business from the insurance giant, and said it would take legal action. Caixin Media Group in turn called the statement defamatory and said it maintains high ethical standards and “sets a strict firewall between its business and newsroom operations, preventing any possible erosion of its journalistic independence.”
The past month has seen Anbang hit by a slew of regulatory actions. In May, authorities stopped Anbang from issuing new products for three months (paywall).
Wu is the third tycoon in less than a year to either disappear from sight or fall out publicly with Chinese authorities. In late January, billionaire Xiao Jianhua disappeared from a posh Hong Kong hotel, with a source saying he was taken away in a wheelchair with a cloth over his head. Meanwhile, from his New York City penthouse, property mogul Guo Wengui, also known as Miles Gwok, has been leveling accusations of corruption against high-level Communist Party officials.
Echo Huang and Visen Liu contributed to this piece.