Chinese government takes over hotel investor
China's Insurance Regulatory Commission (CIRC) has taken control of Anbang Insurance Group Co. for a year.
The China Insurance Regulatory Commission published a letter to Anbang management saying duties of the board and management will now be overseen by a working group of regulators from various agencies for one year. “All transactions of your company, asset trading, information dissemination, contract signing other than traditional insurance business are subject to the consent of the working group,” said the statement dated Feb. 12.
In June 2017, Chinese officials arrested Anbang's former chairman and general manager Wu Xiaohui on suspicion of economic crimes. Wu has been charged with fundraising fraud and embezzlement.His case has been forwarded to the city’s intermediate court for prosecution.
CIRC has yet to decide how to or whether to dispose of assets in Anbang's portfolio.
Anbang currently owns the 1,413-room Waldorf-Astoria Hotel in New York City, which paid $1.95 billion for the hotel in 2014. And in 2016 the firm paid $6.5 billion for Strategic Hotels & Resorts.
CIRC statement also said:
- The takeover may end in a year if asset disposals are completed, strategic shareholders have injected capital and the company is stable. Government control can be extended by as much as another year if needed, but Anbang will ultimately remain a private company.
- Anbang’s external liabilities won’t be affected and the insurer’s operations remain “stable.”
- A government-appointed takeover team will formulate detailed plans for changes in the company’s shareholding structure, the sale of assets, any potential division of the company, and whether other insurers will be appointed to manage parts of Anbang’s operations.