Business
Anbang crisis threatens whole financial sector, say analysts
The fallout from the unfolding crisis at Anbang Insurance, whose chairman, the high-profile tycoon Wu Xiaohui, has stepped down amid reports he has been taken away by the authorities, could reverberate through the whole financial sector, analysts said.
Anbang, one of China’s most aggressive overseas investors, said on Wednesday Wu cannot perform his role “for personal reasons”, and has delegated his authority to other executives.
But a source familiar with the matter confirmed earlier reports in a Chinese magazine that he had been “assisting” an investigation into alleged irregularities at the company and has not returned to his office or home since the end of last week.
Analysts are worried his apparent disappearance – which comes amid a wide-ranging government campaign to impose discipline in the financial markets – could lead to a liquidity crunch that infects the wider industry.
The most worrying issue would be an intensivecancellation of [insurance] policies which would severely weigh on Anbang’s cash flow
Guo Zhenhua, Shanghai University of International Business and Economics
Wu’s case could undermine a widely-held public perception of Anbang as one of China’s most resourceful and powerful companies, according to Guo Zhenhua, head of the insurance department at Shanghai University of International Business and Economics.
“The most worrying issue would be an intensive cancellation of [insurance] policies which would severely weigh on Anbang’s cash flow,” he said.
The company has relied heavily on selling high-risk, short-term insurance policies to beef up its war chest for takeover bids through the capital market.
Capital flow into Anbang will inevitably slow down because of Wu’s case and the enhanced scrutiny of regulators, which will make the company’s situation difficult, said Guo.
Anbang Life Insurance, the flagship of Anbang Insurance Group, reported a solvency ratio of 129 by the end of the first quarter, a sharp drop from 290 per cent in the same period of 2016, but still above the 100 per cent regulatory red line. Solvency ratio is a measurement that broadly describes a company’s ability to cover the financial risks it takes.
Anbang has been at the forefront of developing and promoting short-term, high-yield insurance policies, known as universal life insurance and similar to wealth management products, which in turn has fuelled a spending spree by the firm both in China and abroad in the past few years.
Wu himself has become a household name in China based on his reputation for raising huge sums of money in the blink of an eye, his marriage to former leader Deng Xiaoping’s granddaughter, and his powerful connections with regulators and the second generations of China’s former leaders.
Shares of several publicly traded companies part-owned by Anbang Insurance Group fell in Hong Kong and mainland China on Wednesday. Publicly available information shows Anbang holds major stakes (above 5 per cent) in eight firms listed in Shanghai, Shenzhen and Hong Kong.
Anbang-owned stocks decline in Hong Kong, China in sign of strain at country’s biggest asset buyer
Business
Gordonstoun Severs Connections with Business Led by Individual Accused of Espionage for China
Gordonstoun school severed ties with Hampton Group over espionage allegations against chairman Yang Tengbo. He denies involvement and claims to be a victim of political tensions between the UK and China.
Allegations Lead to School’s Decision
Gordonstoun School in Moray has cut ties with Hampton Group International after serious allegations surfaced regarding its chairman, Yang Tengbo, who is accused of being a spy for the Chinese government. Known by the alias "H6," Mr. Tengbo was involved in a deal that aimed to establish five new schools in China affiliated with Gordonstoun. However, the recent allegations compelled the school to terminate their agreement.
Public Denial and Legal Action
In response to the spying claims, Mr. Tengbo publicly revealed his identity, asserting that he has committed no wrongdoing. A close associate of Prince Andrew and a former Gordonstoun student himself, Mr. Tengbo has strenuously denied the accusations, stating that he is a target of the escalating tensions between the UK and China. He has claimed that his mistreatment is politically motivated.
Immigration Challenges and Legal Responses
Yang Tengbo, also known as Chris Yang, has faced additional challenges regarding his immigration status in the UK. After losing an appeal against a ban enacted last year, he reiterated his innocence, condemning media speculation while emphasizing his commitment to clear his name. Gordonstoun, on its part, stated its inability to divulge further details due to legal constraints.
Source : Gordonstoun cuts ties with business chaired by man accused of spying for China
Business
China Dismantles Prominent Uyghur Business Landmark in Xinjiang – Shia Waves
The Chinese government demolished the Rebiya Kadeer Trade Center in Xinjiang, affecting Uyghur culture and commerce, prompting criticism from activists amid concerns over cultural erasure and human rights violations.
Demolition of a Cultural Landmark
The Chinese government recently demolished the Rebiya Kadeer Trade Center in Urumqi, Xinjiang, a vital hub for Uyghur culture and commerce, as reported by VOA. This center, once inhabited by more than 800 predominantly Uyghur-owned businesses, has been deserted since 2009. Authorities forcibly ordered local business owners to vacate the premises before proceeding with the demolition, which took place without any public notice.
Condemnation from Activists
Uyghur rights activists have condemned this demolition, perceiving it as part of China’s broader strategy to undermine Uyghur identity and heritage. The event has sparked heightened international concern regarding China’s policies in Xinjiang, which have been characterized by allegations of mass detentions and cultural suppression, prompting claims of crimes against humanity.
Rebiya Kadeer’s Response
Rebiya Kadeer, the center’s namesake and a notable Uyghur rights advocate, criticized the demolition as a deliberate attempt to erase her legacy. Kadeer, who has been living in exile in the U.S. since her release from imprisonment in 2005, continues to advocate for Uyghur rights. She has expressed that her family members have suffered persecution due to her activism, while the Chinese government has yet to comment on the legal ramifications of the demolition.
Source : China Demolishes Uyghur Business Landmark in Xinjiang – Shia Waves
Business
Yakult Unveils Restructuring Plans for Its China Operations | ESM Magazine
Yakult reorganized its China operations, dissolving the Shanghai subsidiary while opening a new branch. Manufacturing now consolidates at Wuxi and Tianjin plants, aiming for enhanced efficiency and growth.
Yakult’s Business Reorganisation in China
Yakult has announced a significant reorganisation of its operations in China, aiming to enhance competitiveness and sustainability. The company has dissolved its wholly-owned subsidiary, Shanghai Yakult, which previously managed manufacturing and sales functions. This strategic move is expected to streamline its operations in the Chinese market.
New Branch and Manufacturing Adjustments
Yakult’s head office in China has established a new branch in Shanghai, transferring the sales division from Shanghai Yakult to this location. As of December 6, the branch has started selling various products, including Yakult and its light variants. Meanwhile, the manufacturing plant in Shanghai has ceased operations, with production capacity now absorbed by the Wuxi and Tianjin plants to ensure efficient supply.
Commitment to Growth
The company remains steadfast in its dedication to the Chinese market and is optimistic about future growth. Yakult reassured stakeholders that the reorganisation will have minimal financial impact and aims to enhance efficiency. Founded in 2005 in Shanghai, Yakult China currently employs approximately 2,216 individuals, reinforcing its commitment to customer health and expanding operations.
Source : Yakult Announces Reorganisation Of China Business | ESM Magazine
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