China: Around the case of Deng Xiaoping's grandson-in-law being prosecuted

On February 23, the Shanghai Municipal People's Procuratorate and the China Insurance Regulatory Commission (CIRC) issued separate announcements stating that Wu Xiaohui, former Chairman and General Director of Anbang Insurance Group Co., Ltd. (hereinafter referred to as Anbang Group), has been prosecuted according to the law due to signs of economic crimes; the China Insurance Regulatory Commission has decided to take over Anbang Group. Wu Xiaohui has been missing since his arrest in June 2017, and his fate is only now clear.

According to the announcement, Wu Xiaohui will be tried by the Shanghai No. 1 Intermediate People's Court for "fundraising fraud and usurpation of office"; the period of time for Anbang Group to be taken over by CIRC is 1 year from February 23, 2018. If the period expires without achieving the results of restructuring shares and restoring normal operations, it will be extended for another year, meaning the maximum takeover period is 2 years.

Before Wu Xiaohui was arrested, one of Anbang's biggest problems was massively transferring money abroad to make consecutive expensive acquisitions of shares of foreign companies from the famous Waldorf Astoria hotel in New York, large hotels in San Francisco, Florida... to insurance companies in Korea and the Netherlands, with a scale exceeding domestic assets; even despite warnings about the 15% limit of CIRC, Wu Xiaohui still bragged "What's wrong with CIRC, from the chairman to the gatekeeper of this committee, I know everyone. Up to now, CIRC Chairman Xiang Junbo was arrested for investigation in September 2017, Wu Xiaohui was prosecuted, Anbang fell into the hands of CIRC. Public opinion believes that CIRC's takeover of Anbang also means that Anbang is confiscated.

An Bang is a large insurance group established in 2004 with many subsidiaries (6 wholly owned and 8 joint-stock companies) operating in property, life, health, asset management, and agency insurance... with more than 3,000 branches in 31 provinces, cities, and autonomous regions with more than 20 million customers and overseas asset management companies. An Bang has long been considered one of the insurance companies with the largest revenue in China, with total assets of over 1,900 billion yuan. Some information shows that An Bang holds 91.96% of shares of Century Securities Company, 57.5% of TongYang Life Insurance (Korea), 7.01% of Wan Khoa Group, 22.51% of China Minsheng Bank, 10% of Dai Thuong Group, 20.49% of Kim Dia Group, 25% of Kim Xuc Nhai Company, 10.72% of Chieu Thuong Bank, 15.73% of Kim Phung Science and Technology Company...

The unusual development of An Bang once caused a stir in the business world and public opinion. In January 2015, the newspaper “Southern Weekend” published an article “The Truth About An Bang” stating that in just over 10 years, An Bang had “borrowed” huge capital from the political and business world, from a simple insurance company to a “financial crocodile” with a scale of thousands of billions of yuan, “born with a golden spoon”.

Up to now, An Bang's illegal business activities have not been disclosed. However, the China Insurance Regulatory Commission said that since June 2017, the Commission has sent a working group to this group to carry out inspection, supervision, and urge the improvement of business management activities, so that An Bang's overall business activities are basically stable, and the legitimate rights and interests of customers and partners are protected. The procuratorate has not yet announced the specific crimes of Wu Xiaohui, but in April 2017, some media agencies reported that hundreds of billions of yuan of Wu related to the case were controlled; after Wu was arrested, all investment activities and overseas acquisitions were suspended.

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Wu Xiaohui was born in 1966 in Wenzhou City, Zhejiang Province. Born in a rural village in the suburbs of Pingyang County, he initially worked at the Wenzhou Bureau of Industry and Commerce, then left politics to turn to business, selling cars, and then joined the Shanghai Standard Investment Group of Chen Luyu, son of Marshal Chen Yi, in 2004, founding and becoming Chairman and General Director of Anbang Insurance Group.

Wu Xiaohui has very little contact with the media. Chinese press reports that, coming from a “commoner” background, Hui “rose like a rocket” in the business world thanks to pragmatic marriages. As an official in Wenzhou, Hui married the daughter of a city leader; after “leaving politics for business” and going into the car business, becoming the largest sales agent in the Shanghai Automobile Group, Hui left his wife and married the daughter of Mr. Lu Wenke, former Mayor of Hangzhou and Vice Governor of Zhejiang Province.

When he joined the company of Tran Lo Du, son of Tran Nghi, Huy divorced his wife to marry Dang Trac Nhue, granddaughter of Deng Xiaoping (son of Mrs. Dang Nam, Deputy Minister of Science and Technology - eldest daughter of Deng Xiaoping. It is said that after Huy was arrested, Mrs. Dang Trac Nhue filed for divorce), then through his connections he established and became Chairman and General Director of An Bang Insurance Group. Ngo Tieu Huy was also included in the list of "10 outstanding economic figures of China in 2016".

On June 9, 2017, Wu Xiaohui was arrested for investigation; five days later, on June 14, 2017, the Anbang Group's website suddenly posted a notice: "Due to personal reasons, the Chairman and CEO of Anbang Insurance Group cannot assume his duties." Previously, information had been spread online that Wu Xiaohui had been arrested by Beijing police, then restrained by Shanghai police, and many senior management officials of Anbang were also detained. In September 2017, after the CIRC Chairman was expelled from the Party and his position, Caixin Network published an article clearly stating that during his tenure, Xiang Junbo had abused his approval and management supervision powers to force private enterprises to invest in the insurance industry, and financial "crocodiles" such as Xiao Jianhua and Wu Xiaohui all rushed into the industry, calling the shots and causing chaos in the capital market.