June 15, 2017 9:23 am JST

China corruption fight edges closer to 'red second generation'

Anbang chief's apparent detention suggests growing power struggle in Communist Party

SHUNSUKE TABETA, Nikkei staff writer

Wu Xiaohui, Chairman and CEO of Anbang Insurance Group, at the Boao Forum for Asia Annual Conference 2017 in Hainan Province on Mar. 26. © AP

CHONGQING -- China's ever-widening anti-corruption campaign has begun to target even those close to the children of its founding fathers, with a high-flying businessman seen as the latest figure ensnared amid an apparent power struggle within a Communist Party approaching a leadership reshuffle.

Anbang Insurance Group on Tuesday said that its chairman, Wu Xiaohui, was no longer able to fulfill his duties for "personal reasons." He has not been seen in public since May, and local media report that he has been detained by the authorities.

Wu hails from Zhejiang Province. He married the daughter of a local official, and started a car-leasing business in the 1990s before founding Anbang in 2004. He is friends with Chen Xiaolu, son of Marshal Chen Yi, and supposedly remarried, wedding a granddaughter of revolutionary leader Deng Xiaoping. He is believed to be close with former Chinese President Jiang Zemin as well.

Anbang began as an auto insurer. It has since expanded into other areas, and even purchased New York's landmark Waldorf Astoria hotel. Last fall, Wu met with U.S. President Donald Trump's son-in-law Jared Kushner.

Amid Anbang's breakneck growth, Chinese news outlet Caixin had repeatedly reported on the insurer's questionable fundraising practices and its connections to members of the "red second generation" -- children of leading revolution-era figures.

Wu claims the reports are false and plans to sue. But many believe Caixin's investigation has the backing of Wang Qishan, a close ally of Chinese President Xi Jinping and the head of the Communist Party's disciplinary commission.

Wang himself has come under scrutiny after Guo Wengui, a fugitive businessman, revealed to an American news outlet in April that he had been asked to investigate the party discipline chief's family finances. Some suspect a connection between Wu and Guo.

That month, the party watchdog detained Xiang Junbo, who was then China's chief insurance regulator, over alleged disciplinary violations. In addition to colluding with Guo, speculation holds that he helped Wu and Anbang with illicit activities. The authorities are also expected to investigate whether Xiang, Guo and Wu all conspired together.

Power struggles tend to intensify before the Communist Party congress, a major political event held once every five years. Before the last congress, Bo Xilai, then-party chief in Chongqing and Xi's rival, fell from grace amid a corruption scandal and murder for which his wife was convicted.

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