Tuesday / December 11.
HomeFT SelectAnbang threatens to sue China’s Caixin

Anbang threatens to sue China’s Caixin

Chinese insurance group Anbang has threatened legal action against a leading investigative magazine over what it called “slanderous” allegations about financial irregularities and the marital status of its chairman, in the latest sign of the intensifying power struggle in the financial sector. 

Anbang, which has curbed its long acquisition spree amid heightened capital controls, said in a statement on Sunday that Caixin had “forged rumours” that chairman Wu Xiaohui, who married the granddaughter of former paramount leader Deng Xiaoping, was divorced. 

It accused the magazine, which is run by respected editor Hu Shuli, of discrediting the company’s legitimate business interests, as well as damaging Mr Wu’s reputation. 

A spokesman for Anbang said it was preparing its legal case. Caixin did not respond to a request for comment. 

Since coming to power in 2012, President Xi Jinping has used a campaign against corruption to oust political enemies but also to tighten Communist party control over large parts of the economy. 

That power struggle has recently extended into China’s financial sector, ensnaring some of the country’s wealthiest and most well-connected financiers. 

Xiang Junbo, the chief insurance regulator, was detained in mid-April on suspicion of “severe disciplinary violations”, a euphemism for corruption. Beijing also launched a bid to discredit and arrest Guo Wengui, a US-based businessman who has made claims of corruption by Chinese security officials. The whereabouts of Xiao Jianhua, a financier who dealt with the families of top leaders, remain unknown after he was abducted from Hong Kong in January by Chinese security agents. 

Mr Wu’s Anbang, which is privately owned, shot to global attention when it bought New York’s Waldorf Astoria hotel for $1.95bn in 2014 and went on a broader acquisition spree. But his ambitions have bumped up against the clampdown on overseas acquisitions by Beijing, which is worried about capital outflows, spiralling debt levels and widespread corruption. 

In the past year, the company has failed to complete high-profile takeover bids for Starwood, the US hotels group, and Fidelity & Guaranty Life, a US insurer. 

Mr Wu also held talks with Jared Kushner, son-in-law and adviser to US President Donald Trump, about a possible real estate deal last year but no transaction materialised. 

In recent weeks, rumours have circulated on overseas Chinese websites about Mr Wu being called in for questioning by the Chinese authorities. 

But Anbang denied last week that he had been detained. Mr Wu, who rarely speaks to the media, has met journalists in recent weeks and last week gave an interview to a state media outlet in an apparent effort to dispel speculation about his status. 

The threatened legal action against Caixin was sparked in part by a recent cover story called “Unmasking the magic of Anbang”, which made claims about financial irregularities at the company. The allegations about Mr Wu’s marital status were made in a Caixin story from 2015.

Last week Anbang issued another statement denying that it was facing a cash crisis, following earlier allegations by Caixin.

Additional reporting by Sherry Fei Ju and Lucy Hornby in Beijing

Via FT