The Chinese government has temporarily taken over private insurance company Anbang as its former chairman faces prosecution for "economic crimes." The unusual move came amid efforts to curb excessive corporate debt.
The temporary takeover Friday appeared to signal state concern about Beijing-based Anbang's stability.
The China Insurance Regulatory Commission said Anbang, which had made a series of high-profile acquisitions in recent years, had violated insurance rules that might "severely impair its ability to pay back debts."
Insurance regulators confirmed that the company's former chairman, Wu Xiaohui, was being "prosecuted for economic crimes."
A separate statement by prosecutors in Shanghai said Wu was suspected of fraudulent fundraising and infringement of duties.
Major changes ahead
The government, worried about massive capital outflows and reckless accumulation of debt, has over the past year implemented a host of measures to stem the flow of billions of dollars into what it has called "irrational" investments abroad.
Anbang grew from a domestic seller of property insurance into a financial services powerhouse, hitting headlines in 2014 when it bought the landmark Waldorf Astoria in New York for a record $1.95 billion (€1.58 billion).
A government task force deployed at Anbang will now dispose of certain unspecified assets and revamp the firm's ownership structure.
Anbang will remain a private company, but the takeover will be extended for a maximum of one year, if the overhaul does not proceed as planned.
hg/jd (AFP, dpa)