Sino-Ocean first to swoop on Anbang assets since state takeover

News coincides with founder Wu Xiaohui’s conviction earlier in the day to 18 years in prison with US$1.65b worth of his personal properties confiscated

PUBLISHED : Thursday, 10 May, 2018, 6:57pm
UPDATED : Thursday, 10 May, 2018, 10:40pm

Sino-Ocean Land, a company controlled by China Life Insurance, is buying Anbang Insurance’s equity stakes in a real estate venture in Beijing, becoming the first firm to swoop on major assets owned by the troubled Chinese insurer since the Chinese government took it over in February in the wake of former chairman and founder’s detention.

The market appeared to applaud the deal, with Sino-Ocean shares jumping 2.9 per cent in Hong Kong to close at HK$5.65.

The news coincided with Anbang founder Wu Xiaohui’s conviction earlier in the day in a Shanghai court to 18 years in prison for “financial fraud and embezzlement”, with 10.5 billion yuan (US$1.65 billion) worth of his personal properties confiscated.

Sino-Ocean will take over exactly half of Anbang’s equity interest in Beijing Bangbang Commercial Property Company, a wholly-owned Ambang subsidiary with a registered capital of 200 million yuan, the company said in a statement.

After the sale is complete, Sino-Ocean will contribute 100 million yuan of registered capital to Beijing Bangbang, with Anbang coughing up the rest. 

Sino-Ocean will also create what it termed a strategic partnership with Anbang in five major areas: real estate development, strategic investment, real estate finance, insurance, and pensions. 

“The directors [of Sino-Ocean] believe the company has strong complementarity with Anbang in respect of its business model and resource utilisation,” Sino-Ocean said.

Anbang’s ex-chief Wu Xiaohui sentenced to 18 years behind bars for US$12 billion fraud, embezzlement

“The strategic cooperation is beneficial to bring about synergies between both parties, and rapid development of the main property developments.”

China Life Insurance is currently Sino-Ocean Land’s largest shareholder, followed by Anbang. 

Bar Wu’s conviction, Thursday’s asset sale arguably marks the most high-profile development since the regulators took temporary control of the insurance giant in February, and then injecting 10 billion yuan from a rescue fund into the business to ensure its solvency.

The government said then that a full takeover of the company may take at least a year, depending on asset disposals and equity restructuring, and that its operations remained stable.

Regulators remove Anbang chairman Wu Xiaohui for ‘economic crimes’, take over conglomerate 

Anbang, known for its aggressive global expansion which included buying the famous Waldorf Astoria Hotel in New York, had claimed it controls almost 2 trillion yuan worth of assets worldwide. But it had a registered capital of just 1.1 billion yuan, before the state fund injection.

Last month, the China Banking and Insurance Regulatory Commission (CBIRC) said Anbang would start to select strategic shareholders and introduce private capital to manage its equity restructuring, especially “big privately owned companies” that have collaborative resources with insurance businesses in the pensions, health care, and internet technology sectors.

Since the government takeover, the company has been run on a daily basis by a group of officials from the CBIRC, the People’s Bank of China, and the securities, banking, and foreign-exchange regulators.