Just a few months ago, Wu Xiaohui, chairman of China's troubled Anbang Insurance Group, was in New York trying to secure a better credit rating for the voraciously acquisitive company he founded in 2004. Now he has disappeared, unseen since May, and is believed to have been detained by the authorities. Anbang said on June 13 that Wu was unable to fulfill his duties at the company he founded for "personal reasons."
His disappearance ends a long period during which Beijing-based Anbang used yuan deposits in China as collateral for offshore borrowings to pay for acquisitions such as the $1.95 billion purchase of the Waldorf Astoria hotel on Park Avenue in New York. But then informal measures designed to discourage capital outflows from China were making such financial arrangements increasingly difficult. Moreover, Anbang has suffered from regulatory moves against a range of wealth management products based on insurance policies that have fueled out-of-control credit growth and asset bubbles, particularly in the property market.