Sunday, 22 April, 2018

New York's Waldorf Astoria is now controlled by the Chinese government

New York's Waldorf Astoria is now controlled by the Chinese government New York's Waldorf Astoria is now controlled by the Chinese government
Nellie Chapman | 23 February, 2018, 13:37

It also caps the downfall of Anbang's leader, Wu Xiaohui.

The China Insurance Regulatory Commission said in a statement on its website that it had discovered illegal operations at the insurer and warned of a "serious solvency risk".

It said its actions were aimed at keeping the firm operating as usual and to protect the rights and interests of consumers. During that period, a takeover team formed by officials from China's central bank, insurance, banking, securities and foreign-exchange regulators will be in charge of Anbang's operations.

Any decision related to capital movements, asset sales, information disclosure or contract signing will need approval by the committee, according the CIRC statement, which added that the commission's oversight could be extended for two years if necessary. The company's board of directors and board of supervisors will step down and make way for members of the working group, and the company will continue to operate as normal, the regulator said. This mismatch between Anbang's high funding costs and rapid acquisition of low-yielding assets is thought by some analysts to be among the reasons that China's regulators chose to truncate the insurer's investment spree previous year.

It ran into further problems last June when its chairman, Wu Xiaohui, was detained by Chinese authorities.

Anbang had emerged as China's most eye-catching overseas acquirer in recent years, after its US$1.95 billion acquisition of the Waldorf Astoria hotel in NY. Including that deal, it spent more than $20 billion on 20 overseas purchases between 2014 and 2017, according to financial data provider Dealogic.

Anbang also made a $14 billion dollar bid for Starwood Hotels & Resorts Worldwide, but pulled out of a bidding war with Marriott.

Anbang came under scrutiny several years ago as regulators began to question the true ownership behind the company, which was buying up global properties aggressively.

The company was also in aborted talks with Donald Trump's son-in-law and key adviser Jared Kushner to redevelop a Manhattan office tower, Bloomberg News reported a year ago. The company claims over $300 billion in assets.

Chinese regulators meanwhile tightened controls on Anbang's leading business line, the sale of so-called universal life policies that were essentially a short-term, high interest rate savings product.

Anbang has drawn global attention in recent years for its aggressive pursuit of assets around the world.

Anbang has attracted plenty of controversy outside of China, too.

Photo The Waldorf Astoria hotel, a symbol of NY elegance, will be under the control of the Chinese government.