The Chinese government has taken nearly full ownership of beleaguered carrier Anbang Insurance Group.
According to the The Wall Street Journal, the China Banking and Insurance Regulatory Commission (CBIRC) approved the transfer of a 98.23 percent stake to the China Insurance Security Fund, which deploys funds raised to compensate policyholders in case insurers go bankrupt, on 22 June.
This comes after the fund, which raises capital from mandatory contributions from insurers, injected RMB61bn ($9.7bn) into Anbang in April. The equity injection was “based on the needs of risk disposal” and would be temporary, Anbang said at the time.
In February 2018, the China Insurance Regulatory Commission (CIRC) has announced that the Chinese government has seized control of Anbang Insurance Group.
In an announcement regarding the seizure, the CIRC said Anbang had violated laws and regulations which “may seriously endanger the solvency of the company”, adding that it had seized the company in a bid to “maintain the normal operation of Anbang Group and protect the legitimate rights and interests of consumers”.
Anbang gained international prominence with its $2bn purchase of the Waldorf Astoria and a $5.5bn hotels deal with Blackstone Group. Last year it was among several acquisitive private conglomerates — including Fosun, Dalian Wanda and HNA — to be probed by regulators, amid concern that risky financing was being used to fund takeovers and a broad crackdown on capital flight.