BEIJING/SINGAPORE—China’s Anbang Insurance Group Co said it would reduce its registered capital by nearly one-third, the latest government-directed step of a massive restructuring of the debt-laden conglomerate to curb financial risks.
A state takeover work group, which has seized control of Anbang since February last year, has decided to trim the company’s registered capital to 41.5 billion yuan ($6.21 billion) from 61.9 billion yuan, pending approval from the China Banking and Insurance Regulatory Commission, Anbang said in a statement released on April 16.
The capital reduction will not influence the company’s operations or cause any major impact on its solvency and financial situations, Anbang said.
The move is the latest step by Beijing to steadily clean up the aftermath of a harsh government crackdown on Anbang—once one of China’s most aggressive dealmakers overseas with a series of major acquisitions that have caught the attention of global regulators and investors.
Creditors of the company may request Anbang to pay off its debts or provide repayment guarantees within 45 days after the announcement, the company added.
Anbang’s former chairman, Wu Xiaohui, who masterminded the overseas deal spree including the purchase of New York’s Waldorf Astoria hotel, was sentenced in May 2018 to 18 years imprisonment for fraud and embezzlement. His appeal against the conviction was rejected by a Chinese court in August last year.
Wu illegally raised 65.2 billion yuan through the sale of insurance products beyond regulatory limits, and embezzled 10 billion yuan from Anbang’s insurance fund.
Wu is one of the highest-profile business executives reeled in by Chinese leader Xi Jinping’s sweeping anti-corruption efforts.
In China, business is always driven by politics. And Wu’s political network could very well have landed him in trouble. Sources close to the Chinese Communist Party leadership told The Epoch Times back in June 2017 that Wu had ties to the family of Zeng Qinghong, the former Chinese vice premier and right-hand man to former Party leader Jiang Zemin. Jiang and his associates make up an opposition faction at odds with Xi and his allies.
The source said Wu had helped the Zeng family and other members of the Jiang faction to launder money overseas, while using his business dealings to spy on and influence foreign dignitaries.
By Cheng Leng. The Epoch Times contributed to this report.