SHANGHAI (REUTERS) – The former chairman of China’s Anbang Insurance Group Co Ltd requested leniency at the end of his high-profile trial in Shanghai for alleged economic crimes, including fraud and embezzlement involving more than US$10 billion (S$13 billion), according to court statements.
Wu Xiaohui had contested the charges against him during the proceedings on Wednesday (March 28) but in a closing statement appeared to reverse course, saying he understood and regretted the crimes, the court said on an official social media feed.
The one-day trial came a month after the government seized control of Anbang, owner of New York’s Waldorf Astoria hotel, capping the company’s precipitous downfall amid Beijing’s crackdown on financial risk.
The Shanghai No.1 Intermediate People’s Court said Wu had”expressed deep self-reflection, understanding of and regret for the crimes, and expressed deep remorse for his actions” in his closing statement, according to an online post seen by Reuters on Thursday.
“(He) thanked the justice system for its help, education and remedy, and requested a light sentence,” it said.
The court said it would issue a verdict at an unspecified later date.
Founded in 2004, Anbang became one of the most aggressive investors behind a wave of overseas acquisitions by China’s firms in recent years that have attracted the attention of global regulators and investors.
Its downfall was swift, as was Wu’s, highlighting Beijing’s resolve in a sweeping campaign to deleverage the economy, cut financial risk and discourage what it sees as profligate investing by large companies.
On Wednesday, the Shanghai No. 1 Intermediate People’s Court issued a stream of updates on the case, with alleged details that provide a rare glimpse into the conglomerate’s complex ownership structure and fundraising activities.
Prosecutors said Wu had concealed his control over Anbang and faked financial statements to cheat China’s insurance regulator for approvals to sell insurance products to the public for investment, the court said.
He broke the rules by telling his company to sell investment-purpose insurance products that exceeded the approved amount, the court said.
By Jan 5, 2017, it said, Anbang had oversold 724 billion yuan (S$151 billion) of insurance products and transferred some of the funds to his other companies for investment, debt repayment and personal spending.
All told, Wu was accused of swindling 65.2 billion yuan.
Wu raised objections during the proceedings, contesting alleged facts and charges, according to the court statements.
He claimed he did not understand the law and did not know whether his behaviour constituted a crime. He also believed he had not violated regulatory restrictions.
Wu, known for his hard-driving, hands-on approach and single-minded ambition, has been detained since June, sources have said.
The crimes that Wu has been accused of are punishable by up to life imprisonment, according to the criminal code.
Anbang said in a statement on Wednesday that it had ample cashflow and its operations were stable following its takeover by Beijing.
After a spate of high-profile deals worth more than US$30 billion, Anbang began to run into roadblocks even before Wu’s detention, failing to close on a handful of investments and facing criticism over its opaque shareholding structure.
On Feb23, the government took control of Anbang Group for a period of a year. During the takeover, the company would be managed by officials from the China Insurance Regulatory Commission (CIRC), the central bank and other key financial regulators and government bodies.
It is unclear how Wu’s trial will affect Anbang or its ability to conduct business, but regulators have said they will undertake an equity restructuring of the insurer and protect the rights and interests of its consumers and stakeholders.