Wu Xiaohui, the now disgraced founder of Anbang Insurance Group, was in New York about a year ago on a mission to raise money.
The plan was to receive an investment grade rating from Standard & Poor's, which would allow him to raise debt cheaply offshore. But the agency said the only rating possible was junk. They cited a lack of transparency about Wu's shareholders. This same concern had discouraged investment bankers from supporting Wu's efforts to take Anbang public outside China, and led regulators in the U.S. to block Wu's attempted purchase of American insurer Fidelity and Guaranty Life.
Today, Wu has other problems. He is officially detained in China, and Anbang is under the direct control of the Chinese Insurance Regulatory Commission as investigators look into Wu and the company.
Anbang is not alone in having become a target. Over the past few months, Beijing has criticized numerous companies over their debt-financed acquisition sprees. Three other companies, which are also under pressure to sell assets and clear borrowings, stand out: Dalian Wanda Group, the real estate developer that turned into an entertainment group; HNA Group, the airlines-to-finance conglomerate; and Fosun International, which has interests ranging from pharmaceuticals to the Club Med vacation business.
"These four are egregious companies," said a senior financial regulator in Beijing. "They grew much too fast and have no management."
Another financial official with political connections in Beijing said: "The government is taking measures to make sure these companies do not bring on a financial crisis and to stop their doing crazy things. They will ensure that they deleverage in an orderly way."
However, none of these companies or their executives have suffered the same fate as Anbang and Wu -- they have a crucial financial lifeline. Their bigger creditors include some of China's largest banks. These bankers can tell the authorities that they cannot easily cut their borrowers loose without taking risks with their own balance sheets.
Wu has no such friends. He borrowed heavily from households by selling wealth management products via the shadow banking system, which lacks any official backing whatsoever.
The key Chinese Party Congress of last October emphasized financial stability. And in recent months the macroeconomic conditions that gave rise to concerns earlier in late 2016 and early 2017 about volatility have abated. The yuan appears stable, capital outflows have slowed dramatically and the speed of growth of corporate debt has slowed.
Does that mean Beijing will now be able to wind down its earlier initiatives and force the most heavily leveraged companies to reduce their debt load? Or will the campaign be pursued further and possibly widened to other targets? Billions of dollars of potential international transactions are at stake.
There is no sign of any relief for Anbang. One senior Anbang executive said he does not expect Wu to ever be released.
Meanwhile, Wu has not communicated with his staff or associates since last spring, several of them said. Anbang declined to comment for this article.
Chinese direct investment in North America last year fell 35% following the clampdown on Anbang and others, according to a report from Law firm Baker McKenzie and Rhodium Group, a consultancy.
It appears Beijing first noticed the risks posed by the highly leveraged international expansion of some large companies when Dalian Wanda purchased AMC Entertainment in 2012 for $2.6 billion. It also bought Legendary Entertainment in early 2016 for $3.5 billion.
Even as foreign M&A bankers were celebrating the inflow of international buyers, many investors in China were already shaking their heads.
Today, Dalian Wanda, Fosun and HNA are busy selling assets and cutting debt. In the biggest deal announced so far, an "all-star" team of Chinese investors led by internet conglomerate Tencent Holdings on Jan. 29 agreed to pour 34 billion yuan ($5.41 billion) into Dalian Wanda Group's flagship unit.
Tencent and partners -- JD.com, Suning Commerce Group, and Sunac China Holdings -- will collectively buy out the 14% equity interest purchased by investors when Wanda Commercial Properties was delisted from the Hong Kong stock exchange in 2016.
Meanwhile, HNA announced in late January that it had hired bankers to sell its 29.5% stake in Spain's NH Hotel Group, valued at 632 million euros ($786 million). HNA also applied to the Shanghai stock exchange to halt trading of HNA Infrastructure, the seventh HNA group company to be suspended, on Jan. 30. Bloomberg reported that HNA had warned creditors it faced a $2.4 billion potential liquidity shortfall in the first quarter of 2018.
Fosun has said that it has sold assets and reduced its leverage to address regulators' and investors' concerns. In the first half of last year its debt to equity ratio dropped from over 60% to 47.4%.
Dalian Wanda and HNA declined to comment for this article. On the company website in January, Dalian Wanda chairman Wang Jianlin said the group would further cut debt "through all available means," including the sale of noncore assets. He added it would require "two to three years to bring down debt to an absolutely safe level" and the company would "avoid any credit default globally."
Two months ago, senior Anbang executives discussed the fate of the insurer with CIRC regulators. Options included putting Anbang under Central Huijin Investment, the holding company for the state's stakes in other financial institutions, or having healthier insurers such as China Life take it over.
One Anbang employee said he told the officials that if the group's Waldorf Astoria hotel were put up for auction, it would get no more than half of the $1.95 billion Wu paid three years ago for it.
"It would be perceived as a fire sale," he said. "We would look as foolish as the Japanese." He was referring to the 1980s and 1990s when Japanese groups paid record prices for properties.
There are likely to be more casualties, even as deleveraging becomes the rallying cry of the day; especially if the People's Bank of China continues to tighten monetary policy.
In the U.S., there is increasing backlash against Chinese buyers. In November, Republicans introduced bills in Congress that would give the Committee on Foreign Investment in the United States, which screens foreign purchasers of U.S. assets, added powers to scrutinize Chinese deals.
The premium that sellers have always demanded from Chinese buyers given the uncertainty involved in getting approvals from Beijing will likely go even higher and will now be boosted by the uncertainty coming from outside the mainland, as well as from within.
Henny Sender is the Financial Times' chief correspondent for international finance, based in Hong Kong, and a regular contributor to the Nikkei Asian Review.