Anbang Insurance Group Chairman Wu Xiaohui, who was previously reported to have stepped down from running the firm, could be in deeper trouble than previously believed. If the latest reports are correct, Xiaohui is currently detained by insurance regulators in China.
According to an ABC News report, Wu Xiaohui, who is also the founder of Anbang Insurance Group, was reportedly detained last week by Chinese authorities. The news was first reported by the Chinese magazine Caijing but did not elaborate on the reason for the chairman's detention.
At the moment, the insurer is yet to make an official statement regarding the reported detention of its chairman. On its official website, Anbang Insurance Group did release a statement last June 13, 2017, explaining the absence of Wu Xiaohui without giving away specific details.
"Anbang Insurance Group Chairman Wu Xiaohui is temporarily unable to fulfil [sic] his role for personal reasons. He has authorized relevant senior executives to continue running the business, which is operating as normal."On the other hand, it is yet to be confirmed if Caijing's report, which cited unnamed sources, is indeed accurate. According to Forbes, the article briefly appeared online but was later removed.
Wu Xiaohui founded Anbang Insurance Group Ltd. in 2004. Considered one of the most aggressive buyers of foreign assets among Chinese insurers, Anbang quickly rose to prominence becoming one of the countries biggest insurance company.
However, the insurer's spending spree abroad, which includes the high-profile $2 billion acquisition of Waldorf Astoria in 2015, raised some eyebrows as to how it managed to fund the purchases. While the private company maintains that it raised funds from additional capital from shareholders, Chinese magazine Caixin accused the firm last April that it may have inappropriately used proceeds from policyholders' insurance payments, an accusation that the insurer denied.
One of Anbang's units was ordered last May to stop selling new products. China's insurance regulators said that the firm violated industry rules by offering products designed to evade a regulation put in place for risk management.
'Fallout from the unfolding crisis at Anbang Insurance threatens whole financial sector' https://t.co/jStmY9BIM8 pic.twitter.com/OFohE73Q35The move was seen as a demonstration of China's resolve in reeling in errant firms in its bid to curb risk in the nation's financial system. Other companies have been under increased scrutiny due to alleged questionable practices such as stock market purchases using funds generated by offering high yield insurance products.
— SCMP News (@SCMP_News) June 14, 2017
[Featured Image by Andy Wong/AP Images]