The China Insurance Regulatory Commission (CIRC) has began to prosecute one of China’s largest overseas buyers, Wu Xiaohu, former CEO of Anbang.
Because of the case, the Chinese government has seized all of Anbang’s assets temporarily, which includes billions of dollars worth of Canadian real estate. Eventually, these assets could be liquidated depending on the results of the case.
As of this morning, the CIRC announced that Wu is facing suspicious “economic crimes.” Therefore, the company will be taken over in order to “protect” Anbang’s consumers.
Anbang Insurance Group is a Chinese holding company that mainly deals with banking, insurance and financial services. It was founded in 2004.
According to HuffPost, Anbang owns some prime Canadian real estate, including:
“the Bentall Centre, a landmark office complex in Vancouver, that went for just over a billion; Retirement Concepts, a senior care company in B.C. and Alberta that also just happens to have a massive real estate footprint; and the HSBC Building in Toronto, also known as 70 York Street. “
Apparently, the Canadian government approved these sales without looking into the company's connections to the Chinese state. Anbang has been accused of funding US President Trump’s family beside Russian corporations. The fact that the company is now under state control arguably confirms its affiliation with the government.
The Chinese company’s investment strategy is also quite vague and confusing. Once Anbang's financial paths were investigated, capital reserves were found to be counted more than once on the corporate side, while analysts still found it difficult to explain how the money to buy large real estate materialized at all.
“The hunt led them to remote villages in China, where multi-billion dollar holding companies were located in tiny backroom office spaces.”
Ponzi scheme, much?