Anbang Insurance, owners of Waldorf Astoria Hotel in New York City and other high-profile real estate properties around the world was seized by the Chinese government and its former chairman Wu Xiaohui has been charged with economic crimes on Friday.
The move is seen as an effort to clampdown on Chinese insurers like Anbang which grew aggressively after China loosened restrictions on overseas investments, making trophy acquisitions through debt.
Anbang, issued higher yielding products to raise funds to buy stakes in companies, raising concerns about rising debt levels and risk to its financial system.
The company was accused of violating regulations and concerns raised about its ability to meet insurance claims. A group comprising agencies and regulators including China's central bank and the securities and banking regulator will oversee the company for a year.
The oversight according to a statement by the insurance regulator will take "effective measures to keep the company operating as usual.”
Level of deal-making drew scrutiny
Anbang has purchased a number of landmark properties globally but it entered the US real estate market with its purchase of Waldorf Astoria for a record setting $1.95bn in 2014.
This followed a spate of other real-estate deals by rivals Ping An Insurance, which bought Lloyd’s of London for $388m in July 2013 and China Life’s acquisition of London’s Canary Wharf in June 2014 for $1.35bn.
Its former chairman, Wu Xiaohui, stepped aside in June 2017, saying he was temporarily unable to fulfil his duties. Anbang’s lack of transparency around its shareholding structure and Wu’s political ties drew scrutiny from the authorities.