Chinese insurer reportedly detained amid financial probe

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The fallout from the unfolding crisis at Anbang Insurance, whose chairman, the high-profile tycoon Wu Xiaohui, has stepped down amid reports he has been taken away by the authorities, could reverberate through the whole financial sector, analysts said.

In a brief statement issued in Beijing, Anbang said Chairman Wu Xiaohui's duties would be managed by other senior executives, and that its business was operating normally. The article, citing unnamed sources, was removed shortly after it was posted online.

The logo of the Anbang Insurance Group is seen on the company's offices in Beijing, Wednesday, June 14, 2017.

Established just 13 years ago, Anbang has grown from a domestic seller of property insurance into a financial services powerhouse, making a name for itself overseas by buying New York's historic Waldorf Astoria hotel for a record $1.95 billion in 2014.

It claims to have over 30,000 employees globally and more than 800 billion yuan ($118 billion) in assets.

Anbang's vertiginous rise has also brought unwanted attention.

Some of the headwinds facing Anbang are not unique to the company. The Financial Times said earlier that the 50-year-old chairman was barred from travelling outside the country.

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The Globe and Mail notes Anbang's deal to buy a British Columbia retirement-home chain will go ahead, and quotes the director of the Asia Society's Center on U.S. Anbang's US.representatives said they had no immediate comment.

Attempts by the Chinese insurer to invest in a real estate project affiliated with U.S. President Donald Trump's son-in-law also came to naught this year.

Capital flow into Anbang will inevitably slow down because of Wu's case and the enhanced scrutiny of regulators, which will make the company's situation hard, said Guo.

On Monday, the magazine Caijing reported that Wu, who founded Anbang in 2004 and built it into one of China's biggest insurers, was detained last week by insurance regulators.

In January, Xiao Jianhua, a billionaire, was abducted by Chinese security agents from his apartment at the Four Seasons in Hong Kong and spirited across the border. Calls to Wu's personal phone have gone unanswered. China's insurance regulators have embarked on an industrywide crackdown this year, seeking to curtail sales of risky products and restrict acquisitions of listed firms. Gemdale Corp., a developer about one-fifth owned by Anbang, fell as much as 4.1 per cent in Shanghai.

Anbang has also faced questions about its shareholding structure before a proposed initial public offering of the company's life insurance assets in Hong Kong. Anbang, in response, called the descriptions "malicious" and "inaccurate" and has threatened to sue.

Described by those who know him as smart and passionate, Wu is politically connected - he married the grand-daughter of former leader Deng Xiaoping - and has cultivated relationships on Wall Street with the likes of private equity giant Blackstone Group LP, despite speaking little English.