The former chairman of the beleaguered Anbang Insurance group, Wu Xiaohui, has rejected his conviction for fundraising fraud and embezzlement, forcing a court to review his case. This is the second dramatic twist in judicial proceedings involving the former high flyer.
Wu’s appeal is the latest development in a much-watched case involving China’s once-freewheeling financial groups, which the government has attempted to tame to stave off risks to the financial system, reports Caixin Global.
On 10 May, the Shanghai No. 1 Intermediate People’s Court sentenced Wu to 18 years in prison for fundraising fraud and embezzlement. The court also confiscated CNY10.5 billion ($1.6 billion) of Wu’s assets and suspended his political rights for four years.
Wu had originally denied the charges against him at the beginning of his one-day trial on 28 March, claiming ignorance of the law. Later in the proceedings, he pleaded guilty, expressing “deep self-reflection, understanding of and regret for the crimes and expressed deep remorse for his actions”, while also asking for the court's leniency.
However, he now says that he is innocent, and is appealing his guilty verdict, said Chen Youxi — a lawyer with the law firm Capital Equity Legal Group, which is representing Wu — in a WeChat post yesterday.
The Shanghai People’s High Court, the highest court in the city, has formed a panel for the appeal, in which Mr Chen and another lawyer, Li Guifang with Deheng Law Offices, will serve as the defence counsel, Mr Chen said.
During the trial, prosecutors accused Wu of raising more than CNY723 billion from illicit insurance sales by Anbang’s property insurance subsidiary, Anbang Property and Casualty Insurance. The prosecution also accused Wu of swindling investors out of CNY65 billion of those funds, which was never repaid to Anbang Property. Prosecutors said Wu transferred CNY10 billion in insurance premium income from Anbang Property to other companies that he controlled. The proceeds were used to repay debts and inject capital back into Anbang Property.
Under Wu’s leadership, Anbang transformed itself from an auto insurer in 2004 to a conglomerate, gaining publicity for its aggressive investment moves including the 2015 purchase of New York City’s iconic Waldorf Astoria hotel. However, Anbang’s fortunes turned when the authorities started investigating the insurance giant in March 2017.
As soon as Wu learned of the investigation, he ordered Anbang’s senior executives and key employees to flee China or take leave to avoid being investigated, as well as to change their computers and cellphones, delete emails and destroy digital materials, prosecutors said at his trial.
Regulators took control of the group in February and bailed it out with funds totalling $10 billion funds from an insurance industry fund. To raise money, the Anbang group is now seeking to sell its assets and to attract a strategic investor.