Insurance group's owner admits fraud charges
WU Xiaohui, former chairman and general manager of Anbang Insurance Group, admitted fraud charges involving more than 75.2 billion yuan (US$12 billion) when he appeared at Shanghai No. 1 Intermediate People’s Court yesterday.
Prosecutors said Wu owned and controlled more than 200 companies which were little-known to others and had increased his stake in Anbang with investments from these companies to have “absolute control” over the group.
His stake in Anbang, set up in 2004 as Anbang Property & Casualty Insurance Co, had reached 98.22 percent by the end of 2014 after more than 30 of his companies injected 49.9 billion yuan in additional capital.
Prosecutors said he used Anbang as a platform to raise funds and a channel to transfer premiums from clients into his own pocket.
In 2011, under Wu’s order, Anbang launched a new insurance product designed for investment purposes and faked documents to obtain approval from the China Insurance Regulatory Commission.
The regulator put a ceiling on sales of the product, based on Anbang’s financial status, but Wu ignored that, and issued false financial reports to make people believe in the group’s ability to pay.
By January 5 last year, the product had been sold to more than 10.56 million people, raising 723.8 billion yuan more than was allowed. He used 65.2 billion yuan to invest in projects, clear debts and lead a lavish lifestyle.
Wu also ordered others to transfer 3 billion yuan from Anbang to his other companies, using it to repay debts of 2.925 billion yuan. Another transfer, worth 7 billion yuan, was in June 2011 when he spent 6.9 billion yuan to increase his stake in Anbang.
Prosecutors said Wu ordered senior executives to go abroad and destroy information so as to cover up his crimes after he was told of a police investigation in March last year. “He severely destroyed the financial order and impacted the country’s financial safety,” prosecutors said.
The court is to announce sentence later.
In February, the regulatory commission announced it was taking over Anbang for a year to maintain normal operations and protect consumers’ rights.