Wu Xiaohui, the former chairman of Anbang Insurance Group, at a court hearing in Shanghai. Source: CCTV screen grab

A saga unfolding over the last year has spawned a seemingly endless collection of stories documenting the proverbial fall from grace of one of China’s most successful business executives. Wu Xiaohui, the founder of Anbang Insurance Group, turned the page on another chapter of his tumultuous life when he was sentenced in Shanghai on Thursday to 18 years in prison on charges of fraud and embezzlement.

The court decision, reported by Chinese state media, also ordered the confiscation of US$1.6 billion in Wu’s personal property and deprived him of his political rights for four years.

For years, while at the helm of Anbang, Wu led the company to become one of China’s most high-profile overseas investors, culminating in the purchase of the iconic Waldorf Astoria hotel in New York. But the overseas shopping spree was fueled by a piece of the very same mountain of debt that Beijing has become determined to clear.

Signs that Anbang’s party was coming to an end began surfacing in early 2017, notably, when a Chinese magazine published an in depth report on the insurance company’s murky ownership structure. Caixin, a publication whose editor is said by some to have close connections to Chinese Vice-President Wang Qishan, raised questions about Anbang’s source of capital used to fund its aggressive overseas acquisitions. Wang, a close ally of Xi Jinping, was at the time China’s anti-corruption tsar.

The prison sentence makes official that the rules of the game for Chinese billionaires, including those with deep political connections, have changed. Wu was famously married to the late Chinese leader Deng Xiaoping’s granddaughter, a family relationship that brought with it speculation that he received political favor or protection.

Chinese executives of so-called “grey rhinos” – large corporations with enough bad debt to be considered a systemic risk by Chinese authorities – have been on high alert amid increased scrutiny for more than a year. Wu’s confinement adds an exclamation point to the warning sign.