China’s Dajia hid ownership woes in Anbang Insurance group assets from early bidders as Mirae seeks to cancel US$5.8 billion deal

Name: The rise and fall of Anbang’s deposed chairman Wu Xiaohui
Uploaded: 2020-08-25T02:01:27.000Z
Duration: 2 min 40 s
Description: The rise and fall of Anbang’s deposed chairman Wu Xiaohui

Dajia Insurance assumed most of Anbang Insurance’s assets after the fall of Wu Xiaohui, state capital injection

Before his jailing, Wu signed an agreement empowering four Delaware shell companies to sue on his behalf if Anbang’s hotels were expropriated by the government

3-MIN READ3-MIN

Wu Xiaohui, former chief of Anbang Insurance, seen in this image taken from undated video footage on China's CCTV, during his March 2018 trial at the Shanghai No. 1 Intermediate People's Court. He was later jailed for 18 years. Photo: CCTV via AP Video

Bloomberg

Published: 10:01am, 25 Aug 2020Updated: 10:15am, 25 Aug 2020

China’s Dajia Insurance Group knew there were questions about the ownership of some US luxury hotels they put up for sale last year but did not tell more than a dozen first-round bidders, a lawyer testified in the trial over whether Mirae Asset Global Investments Co. can get out of the deal.

Stephen Glover, one of the attorneys hired by Dajia to oversee the auction of a portfolio of famed hotels such as the Westin St. Francis in San Francisco and the Loews Santa Monica Beach Hotel, said in the Delaware Chancery Court trial his team wanted to “get their arms around” the problem of phoney deeds filed to the properties before they disclosed them.

“We wanted to squash this as quickly and effectively as possible,” Glover told Judge Travis Laster Monday at the start of the trial over the busted-deal case. “It does not make sense to talk with buyers about the problem until you have” a plan to deal with it, the attorney added.

Dajia informed the two final bidders, including Mirae, in August 2019, Glover added. Mirae, which bought the portfolio for US$5.8 billion the following month, cancelled the deal in May, arguing Dajia violated the agreement by withholding information about the alleged deed scam as part of a cover up designed to ram the deal through.

02:40

The rise and fall of Anbang’s deposed chairman Wu Xiaohui

Dajia, which assumed most of the assets of struggling Chinese insurer Anbang Insurance Group, says it satisfied all terms of the sale and that it should have closed in April as scheduled.

The buyout is among nearly 20 transactions that have fallen apart so far this year, many of which cite the Covid-19 pandemic as one of the causes. Mirae also points to the coronavirus’ decimation of the hotel industry as another reason to pull out.