BEIJING -- Despite hopes that China's recent crackdown against Anbang Insurance Group will help end cronyism in the country, the fall of the company's charismatic founder appears more a result of him losing the backing of powerful Communist Party figures.
The Chinese government seized control of the insurer in February. Founder and former Chairman Wu Xiaohui was charged last month with fraud and embezzlement, after he was detained in June 2017.
Anbang has amassed 2 trillion yuan ($316 billion) in assets since its founding in 2004. The company stands as China's third-largest insurance provider in terms of premium income. But its meteoric rise was made possible largely by the relationships Wu formed with members of China's "red nobility."
Wu was born in a farming village near the southern city of Wenzhou. He quit his job at a local government office to seek his fortune in the business world, as did many other bureaucrats inspired by former leader Deng Xiaoping's speeches on modernization and reform during his tour of southern China in 1992.
It was around this time that Wu gave up his seat for an elderly woman on a long-distance bus ride. Several days later, he received a letter from the mayor of Hangzhou. The woman turned out to be the mayor's mother, and this eventually led to Wu marrying the mayor's daughter.
Wu later moved to the city of Ningbo, where he opened a dealership for SAIC Motor. He was successful, thanks in part to his powerful father-in-law, and Wu became close with Hu Maoyuan, who later served as SAIC Motor chairman from 2008 to 2014.
Hu introduced Wu to Chen Xiaolu, the son of renowned military Marshal Chen Yi. Wu partnered with the younger Chen to launch an infrastructure company in Shanghai. Both Chen Xiaolu and Hu also joined Anbang's board when Wu founded the insurance provider.
Through Chen Xiaolu, Wu eventually met one of the most prominent families in China: the Dengs. Wu lobbied hard to attend the wedding of Deng Xiaoping's granddaughter, and apparently even gifted an extraordinary 100 million yuan to the new couple, according to a former Anbang employee. Deng's granddaughter soon divorced, and she is thought to have married Wu.
Wu rose to the top by making connections with all the right people, from Hangzhou's mayor to Deng. The former Chinese leader was a particularly valuable resource to have in the insurance business, which is subject to regulatory approval.
Wu "almost acted like a representative of the Deng family," the former Anbang employee said. The mogul drastically intensified his focus on overseas acquisitions around 2014, including the landmark Waldorf Astoria hotel in New York.
But Wu's association with the Dengs had soured by then, and his relationship with Deng's granddaughter was on the rocks. She even withdrew her capital from Anbang by the end of 2014, local reports show.
Chen Xiaolu revealed in January 2015 that he no longer held shares in Anbang or received a salary from the company. He died of a heart attack last month.
Some claim Wu's shopping spree was an attempt to move his assets abroad. Anbang collected short-term funds through its insurance policies to pay for overseas acquisitions. But this meant a plunge in the value of Anbang's overseas assets would harm the company's ability to pay insurance claims, in turn threatening China's entire financial system.
Chinese President Xi Jinping calls financial security vital to national security. Given his campaign to curb financial risks, it was only a matter of time before the president took issue with Anbang's wildly growing debt.
Private conglomerate CEFC China Energy also has come under investigation by authorities, according to reports this month.
Some interpret these investigations as Xi taking a scalpel to the cozy ties between top Communist Party officials and private businesses. But Xi, at the twice-a-decade Communist Party National Congress last fall, said the party will be involved in every decision made by the country's businesses.
For example, automaker Zhejiang Geely Holding Group recently became the leading shareholder in Daimler. Geely has spent over $10 billion on overseas acquisitions since last summer -- a massive sum for a company that sells only 1.25 million new cars a year. Chairman Li Shufu is rumored to have close ties with the Xi family, and he continues to send cash abroad despite Beijing's crackdown on capital flight.
Xi's iron grip on power has yielded little meaningful progress in ending crony capitalism. The players may change, but the game remains the same.