Anbang crisis threatens whole financial sector, say analysts
Uncertainty after chairman Wu Xiaohui stepped down amid reports he was taken away for investigation could spark a liquidity crunch
The fallout from the unfolding crisis at Anbang Insurance, whose chairman, the high-profile tycoon Wu Xiaohui, has stepped down amid reports he has been taken away by the authorities, could reverberate through the whole financial sector, analysts said.
Anbang, one of China’s most aggressive overseas investors, said on Wednesday Wu cannot perform his role “for personal reasons”, and has delegated his authority to other executives.
But a source familiar with the matter confirmed earlier reports in a Chinese magazine that he had been “assisting” an investigation into alleged irregularities at the company and has not returned to his office or home since the end of last week.
Analysts are worried his apparent disappearance – which comes amid a wide-ranging government campaign to impose discipline in the financial markets – could lead to a liquidity crunch that infects the wider industry.
The most worrying issue would be an intensivecancellation of [insurance] policies which would severely weigh on Anbang’s cash flow
Wu’s case could undermine a widely-held public perception of Anbang as one of China’s most resourceful and powerful companies, according to Guo Zhenhua, head of the insurance department at Shanghai University of International Business and Economics.