China’s regulator has approved a 60.8 billion yuan (US$9.67 billion) capital injection for Anbang Insurance Group. The move comes after the government seized control of the debt-ladened company in February and its former chairman Wu Xiaohui admitted fundraising fraud involving more than $10 billion.
The injection of cash from the Insurance Protection Fund will take Anbang’s registered capital to 61.9 billion yuan, the China Insurance Regulatory Commission, or CIRC, reported in a statement on Wednesday.
One of China’s largest insurers, the group has claimed on its website that it has almost 2 trillion yuan of assets.
“As a non-government industry rescue fund, the Insurance Protection Fund only temporarily holds stakes in Anbang,” the CIRC confirmed in a statement. “Next, the fund will transfer its stakes methodically and let Anbang remain a privately owned company.”
Last week, Wu asked for leniency in a Shanghai court after being charged with “fraudulent fundraising” and “work-related embezzlement.” Prosecutors had accused him of defrauding investors of 65.3 billion yuan ($10.4 billion).
Wu’s trial was held on March 28 at the No. 1 Intermediate Court, where prosecutors accused Wu of transferring funds to companies he personally controlled for investment overseas.
The court also was told that Anbang had sold investment products that exceeded allowable fund-raising amounts by a whopping 723.9 billion yuan.
“The accused Wu Xiaohui said he did not understand the law and did not know that these actions constituted crimes,” the court said, adding it would issue a verdict at an unspecified later date.
– with reporting from Reuters and AFP