Chinese Authorities Allegedly Seize Nearly 300 Private Firms After Anbang Takeover

Chinese Authorities Allegedly Seize Nearly 300 Private Firms After Anbang Takeover
Anbang Insurance Group's headquarters in Beijing in this file photo. (Andy Wong/AP)

The Chinese regime has allegedly taken control of 299 private companies after it acquired the conglomerate Anbang Insurance Group, according to a source close to the company’s former chairman. Experts believe that the regime’s recent takeovers of private firms indicate that it is reining in these companies and desperately trying to raise capital as the country is facing an economic downturn.

In the aftermath of the sacking of Anbang chairman Wu Xiaohui, his mother has taken to social media to expose what has become of her once wealthy son and the successful private insurance conglomerate he headed.

Wu was taken away for investigation on June 9, 2017. The Chinese government took control of the company after Wu was prosecuted on Feb. 23, 2018 on charges of fundraising fraud and abuse of his position, which later led to an 18-year prison term and a court order to confiscate 10.5 billion yuan ($1.6 billion) from Wu.

Hundreds of Private Companies Forcibly Taken Over

On Sept. 30, Wu’s mother, Lin Xiangmei, wrote a post on WeChat, a Facebook-like social media platform, alleging that Chinese authorities have seized 299 private companies under the new Anbang, and that a single lucrative project from one of these companies alone has generated a revenue of 12.4 billion yuan ($1.76 billion) so far.

All of these 299 companies are Anbang’s business partners, according to Lin. Anbang’s new executive team forcibly took over ownership of these companies without even notifying their shareholders, she said.

Lin said she decided to make it known to all because she was outraged at the Chinese authorities. One of the reasons for her outrage is that neither she nor any other family members have been allowed to visit Wu in prison or speak to him by phone. She has been denied visits of her son at Baoshan Prison in Shanghai 28 times. In addition, Li Jinxing, the attorney hired by Lin to represent her son, has had his attorney license revoked by the Chinese authorities, according to Lin.

Anbang’s Obscure Rise

Wu has been a mysterious figure in China. He married Deng Zhuorui, the granddaughter of former Chinese leader Deng Xiaoping in 2003. And one year later, Wu founded Anbang as a small insurance company.

The company grabbed headlines in 2014 when it acquired the famous luxury hotel Waldorf Astoria in New York. In the following two years, Anbang continued to stun the world with its aggressive overseas acquisitions.

According to public data, Anbang’s registered assets upon its founding in 2004 were worth 500 million yuan ($71 million). By the end of 2016, it became China’s third largest insurer, with total assets reaching 1.97 trillion yuan ($279 billion).

Takeovers: A Sign of Economic Trouble

Dr. Ng Ming Tak, the former Senior Vice President of China Construction Bank, told Apple Daily that Anbang’s takeover of private companies is not an isolated case. Several well-known top executives recently resigned one after another, including Jack Ma of Alibaba, Ma Huateng of Tencent, and Li Yanhong of Baidu. In addition, many government representatives were assigned to take management positions in these companies. It is the Chinese Communist Party’s (CCP) new move to crack down on private enterprises and generate revenue through them.

He pointed out that capital flight has been a serious problem for China in the past decade. Moreover, the ongoing U.S.-China trade war has further diminished China’s capital reserves. But the Chinese regime is in desperate need of money to fight this trade war.

“Chinese authorities are now taking money from big companies directly, by taking over ownership,” Dr. Ng said, “This is a last resort, and an indication that China is experiencing serious economic problems, a sign that the Chinese communist regime is on the brink of total collapse.”