Anbang, founded in 2004, has grown from a seller of car insurance into one of China’s largest insurance providers, holding nearly 2 trillion yuan in assets. The Beijing-based insurer was known for an aggressive global buying spree in recent years, which included the acquisition of the New York’s Waldorf Astoria hotel in 2014 for almost US$2 billion.

Prosecutors in the case said Wu had severely harmed “the safety of investors’ capital” and “crushed national financial security”.

The top banking and insurance regulator said in April that it will inject 60.8 billion yuan into the beleaguered insurer to ensure its solvency.

The Chinese government seized control of the company in February.

Thursday’s sentencing closes a key chapter in a series of investigations into several of China’s biggest overseas asset buyers – known in China as “crocodiles” – since June 2017, in a government programme to pare back leveraged buyouts and rein in financial malfeasance. 

It also completes the spectacular fall from grace of a man who once seemed to have it all.

Partnered with the son of a marshal who had helped found Communist China, married to the granddaughter of the country’s former paramount leader, and backed by China’s most powerful state firms and the industry’s top regulator, Wu was once the country’s most feted business tycoon. He was famous for his hard-handed business manner, his single-minded will to get ahead and willingness to confront anyone who got in his way.

Born into an ordinary family in a village in east China’s Zhejiang province in 1966, Wu started from scratch and eventually built a business empire holding 1.97 trillion yuan (US$310.9 billion) in assets and ranked 139th on the 2017 Global Fortune 500 list.

Backed by enormous capital power, he led his company on a wide-ranging global shopping spree, snapping up property landmarks like the Waldorf Astoria hotel in New York, and mounting a takeover battle against the Marriott Group with a US$14 billion bid to buy Starwood Hotels.

Between 2012 and 2016, Anbang WAS involved in 14 acquisitions valued at US$25.22 billion. 

Wu also talked with US President Donald Trump’s son-in-law, Jared Kushner, about buying into a skyscraper project in Manhattan in 2016.

But the fame and fortune he built over decades came crashing down with remarkable speed. 

On March 28, clad in a dark blue suit, the 52-year-old showed up to a court in Shanghai. Weeping in front of the China Central Television camera, the disgraced tycoon said he “regretted his mistakes”, and begged for a lenient sentence.

By that time Wu had seen Anbang Group taken over by the authorities, while he himself faced charges of fraud and embezzlement that could have put him in prison for life.

His rise was closely tied to what were once some of the biggest names in China’s political circles. His fall also tracked the decline of those once-celebrated families, and the reshuffle of the country’s ruling elite.

“Wu is smart and hardworking. But he tended to forget about his identity of late. He forgot he was the senior manager chosen by a powerful group to make money, and mistook himself as the power itself. That’s what caused this tragedy,” said a long-time business partner of Wu and Anbang, who asked to remain anonymous.

Wu’s early life has left few traces. Sources said he started out as a civil servant in his hometown in the early 1990s, but left for a business career a few years later.

By the early 2000s when he met Deng Zhuorui, granddaughter of former Chinese leader Deng Xiaoping, he was already a successful car salesman and into his second marriage.

It was his then business partner Chen Xiaolu, a son of marshal Chen Yi, a member of China’s first communist ruling generation, who introduced him to Deng.

The marriage was kept extremely low key, so that few people even knew when the wedding took place.

Even the man who had brought the two together in the first place “was not invited to their wedding and did not know of their marriage beforehand”, a personal friend close to Chen said.

When Chen asked Wu why he had not been told about the marriage, Wu said he had felt “ashamed” because he was a married man when he first met Deng.

Chinese media outlets Caixin and Southern Weekly reported that the marriage took place in 2004, after Wu had divorced his second wife, herself the relative of a Hangzhou mayor.

Anbang Group filed a statement in early 2017 denying Caixin’s report on Wu’s marital status, describing it as defamatory. 

True or not, the year 2004 was certainly an important milestone in Wu’s business career. It saw the founding of a company called Anbang Property Insurance in Zhejiang province by seven shareholders including state-owned SAIC Motor, which took up a 20 per cent controlling stake.

The second biggest shareholder, holding 18 per cent, was Shanghai Standard Infrastructure Group, a subsidiary of a company registered as 40 per cent owned by Chen and 60 per cent by Deng.

A year later, another state-owned giant, Sinopec, bought up 20 per cent of Anbang Property Insurance for 340 million yuan, becoming the joint-biggest shareholder with SAIC.

Sinopec’s chairman at the time, Chen Tonghai, was sentenced to death in 2009 in what was believed to be the country’s biggest bribery case but was later granted a reprieve.

The fall of Chen did not bother Wu, or indeed Anbang.

By the time Anbang Property Insurance was restructured into Anbang Group in 2011, the firm was a financial conglomerate on the ascent, already strong enough to acquire a commercial bank in Chengdu for 5.6 billion yuan, and to see off China’s best-connected property developers when competing for land in Beijing’s Central Business District (CBD).

Conflicts erupted from time to time, particularly when other powerful business magnates were involved. But more often than not, Wu emerged as the victorious party.

A consortium that included China International Capital Corporation (CICC) won a bid for a land plot for 2.5 billion yuan in 2010, but was then not allowed to start developing the site. Late last year a source involved in the case told the Post that was because Anbang would not submit the land plot back to Beijing’s municipal government after first-stage development. 

CICC is China’s most powerful investment bank, once headed by Levin Zhu, the son of former premier Zhu Rongji.

“We have been in dispute with Anbang for about seven years regarding handing over a land plot in CBD. They would just ignore requests to fulfil legal procedures, not only from us, but also from the Beijing municipal government,” said a source familiar with the dispute.

“There is simply no way to argue with Wu. He shies away from us, claiming to be busy, while the government seems to have no binding power over him.”

According to the prosecutor in Wu’s trial, he had increased his control of the company through three major capital injections in 2011 and 2014, ending up owning 98.2 per cent of Anbang Group.

In the process, Anbang’s registered capital swelled from 5.1 billion yuan to 61.9 billion yuan, giving it the capacity to issue more aggressive insurance policies and carry out more mergers and acquisitions.

However, the prosecutors said capital injection worth around 50 billion yuan had come from insurance premiums, which is against rules set by the China Insurance Regulatory Commission (CIRC).

The growth of Anbang’s income from insurance premiums became the stuff of legend in the industry. The group’s flagship Anbang Life Insurance unit, for instance, more than quadrupled its premiums income to 40.5 billion yuan in 2014. The premium income of the group as a whole surged by almost 39 times to 52.9 billion yuan in the year to 2014, thrashing all competitors.

The strong backing of then CIRC chairman Xiang Junbo played a key role, industry insiders say. 

More than 96 per cent of the premiums income under Anbang Life came from banking channels between 2012 and 2014, compared to an industry average of less than 40 per cent, according to a report issued by state-owned Dagong Global Credit Rating.

Xiang was placed under a corruption probe in April 2017, and expelled from the Communist Party in September. A preliminary investigation found he had abused the power to supervise and approve, according to the party’s anti-graft watchdog.

“It is easy to hold a corrupted official accountable for wrongdoings. But if the problem with Xiang himself could lead to such big financial risks, it is more important to review the whole regulatory system, otherwise it would not solve the problem thoroughly,” said Professor Sun Wujun from the Nanjing University Business School.

“In the past decade, as financial innovation flourished amid ample liquidity, regulators failed to catch up and see through risks hidden by complicated structuring of financial products and heavy cross-investment. It is a key area that Beijing is pursuing and has been tightening,” he added.