BEIJING—Chinese authorities confirmed the transfer of nearly full ownership of troubled Anbang Insurance Group Co. to a government-controlled fund, effectively transforming a once boldly entrepreneurial firm into a state-owned enterprise.
The China Banking and Insurance Regulatory Commission has approved the transfer of 98.23% of Anbang to China Insurance Security Fund, according to a statement Friday from the regulator.
The fund, which serves as a backstop for the country’s insurance companies, pumped nearly $10 billion into Anbang in April amid government concerns the conglomerate would collapse. The bailout signaled the transfer of control, but until Friday details of its stake weren’t known. The fund will hold control of Anbang temporarily until a private shareholder can be found, said a person with knowledge of the process.
In the meantime, the panel of financial regulators that has managed Anbang since the government takeover in February will continue to manage Anbang, said the person. He said the initial one-year time frame the government announced in its seizure notice may be extended by another year if necessary.
The transfer is the latest step by the government to get a handle on Anbang, which has claimed $310 billion in assets and 35 million customers. The fund has acted as a clearing house for shares in insurers before, but Anbang’s large size is likely to complicate a sale to other companies, according to analysts, because its operations would be redundant to other big insurers and because restrictions limit who can enter the industry.
Anbang’s takeover marked a stunning reversal for founder Wu Xiaohui, a math whiz who in a few years built one of China’s largest insurers and had purchased assets like New York’s Waldorf Astoria Hotel.
After the transfer the percentage now owned by China Insurance Security Fund is virtually identical to a level of control in Anbang that Shanghai prosecutors alleged Mr. Wu maintained by using concealed methods. After a secretive one day trial in March, Mr. Wu was found guilty of a variety of financial crimes related to fraud and abuse of power and sentenced to 18 years in prison.
The transfer is the latest step by the government to get a handle on Anbang, which has claimed $310 billion in assets and 35 million customers. The fund has acted as a clearing house for shares in insurers before, but Anbang’s large size is likely to complicate a sale to other companies, according to analysts, because its operations would be redundant to other big insurers and because restrictions limit who can enter the industry.
Anbang’s takeover marked a stunning reversal for founder Wu Xiaohui, a math whiz who in a few years built one of China’s largest insurers and had purchased assets like New York’s Waldorf Astoria Hotel.
After the transfer the percentage now owned by China Insurance Security Fund is virtually identical to a level of control in Anbang that Shanghai prosecutors alleged Mr. Wu maintained by using concealed methods. After a secretive one day trial in March, Mr. Wu was found guilty of a variety of financial crimes related to fraud and abuse of power and sentenced to 18 years in prison.
