Huaxia Life is in talks for a sale to Ping An, as Chinese regulators pick apart the financial empire of missing tycoon Xiao Jianhua
- The discussions have been continuing for many months, but no progress has been made because of price issues, sources said
- Huaxia’s earlier sale of a 25 per cent stake to Shenzhen-listed Zhongtian Financial Group in 2017 is yet to be completed
Talks between the two parties had gone on in fits and starts for several months since last year, stalling over the asking price of Huaxia, which claims to have 500 billion yuan (US$71 billion) in assets, with half a million employees in 24 nationwide branches, according to the sources.
“We do not comment on rumours,” Ping An’s co-chief executive Jessica Tan Sin-yin said last week after a results press conference in Hong Kong. Huaxia would not comment.
Meanwhile in Hong Kong, Xiao’s relatives were offloading property assets. Last week, Xiao Yonghong and Sun Darui, the younger sister and brother-in-law of the missing tycoon, incurred a loss of HK$8.23 million, or 31.4 per cent, on the sale of a retail unit at Causeway Place shopping centre.
Heng Feng is the second of several banks in Xiao’s financial empire to be put under state ward, after the May 24 nationalisation of Baoshang Bank in Inner Mongolia’s Baotou city.
Zhongtian, which has businesses in real estate and financial services, said it was in danger of having 7 billion yuan in deposit forfeited because of uncertainties over the deal, according to its disclosure this month to the Shenzhen Stock Exchange.
Huaxia, founded in 2006, is the privately owned flagship of Xiao’s sprawling financial conglomerate, controlled through layers of proxies and related parties. As much as 92.9 per cent of its shareholding was concentrated in the hands of six shareholders, all little known local companies, each controlling between 11 per cent and up to 20 per cent of the insurer.
Huaxia held shares in hundreds of closely held and publicly listed companies, including a minority stake in Ping An, owning 3.4 per cent of Ping An’s yuan-denominated A shares in 2015, before reducing the stake to 2.17 per cent in 2017. Huaxia didn’t show up among Ping An’s top 10 shareholders in the 2018 annual report.
The Shenzhen-based conglomerate is the world’s seventh-largest company by capitalisation, behind Apple and ahead of Royal Dutch Shell, according to Forbes’ 2019 Global 2000 list.
