Chinese State TV Shows Insurance Tycoon Admitting Guilt

BEIJING (AP) — State TV has shown the founder of the Chinese insurance company that owns New York City’s Waldorf Hotel admitting his guilt at a trial on charges he fraudulently raised $10 billion from investors.

Wu Xiaohui, former chairman of Anbang Insurance Group, also is accused of improperly diverting money to his own use. Regulators seized control of Anbang in February after a multibillion-dollar global asset-buying spree prompted questions about its financial stability.

“I clearly admit my guilt and repent for it,” Wu was shown saying Wednesday in court in Shanghai. “I plead with the court and the parties concerned to give me a lighter sentence.”

Wu, who founded privately owned Anbang in 2004, initially denied his guilt at his one-day trial, according to an earlier court statement.

Nearly all Chinese prosecutions end in conviction. Defendants usually express remorse in hope of obtaining leniency.

The case added to an avalanche of scandals for Chinese insurers. The industry’s former chief regulator was charged in September with taking bribes. Executives of other insurers have been charged with corruption and mismanagement.

Beijing announced plans March 13 to merge the Chinese banking and insurance regulators in an effort to step up scrutiny of those fast-evolving industries.

The ruling Communist Party has made reducing financial risk a priority after a run-up in debt owed by Chinese companies and local governments prompted rating agencies last year to cut Beijing’s credit rating for government borrowing.

Anbang discussed possibly investing in a Manhattan skyscraper owned by the family of U.S. President Donald Trump’s son-in-law and adviser, Jared Kushner. Those talks ended last year with no deal.

Wu gained a reputation for aggressive expansion in a stodgy industry dominated by state-owned insurers.

The company grew to more than 30,000 employees with 35 million clients. It diversified into life insurance, banking, asset management, leasing and brokerage services.

Other insurers have been accused of endangering the financial safety of their industry through reckless speculation in stocks and real estate.

The chairman of a life insurance company was barred from the industry last year in an unrelated case and a third company was prohibited from trading stocks.

The post Chinese State TV Shows Insurance Tycoon Admitting Guilt appeared first on InsuranceNewsNet.