Shanghai (AFP) – A Chinese court sentenced the former head of troubled Anbang Insurance Group to 18 years in prison on Thursday for fraud and corruption, Xinhua news agency said, following accusations of stealing more than $10 billion.
Wu Xiaohui was toppled as Anbang’s head last year and China’s insurance regulator announced an unprecedented takeover of the conglomerate in February, as the government moves to prevent heavily-indebted large private companies from collapsing and posing a risk to the financial system.
Wu’s trial was held on March 28 at a court in Shanghai, where prosecutors accused him of defrauding Anbang of 65 billion yuan ($10 billion).
The funds were transferred to companies that Wu personally controlled for investment overseas, to pay down debts, or “personally squandered,” the court had said.
The court also was told that Anbang had sold investment products that exceeded allowable fund-raising amounts by a whopping 723.9 billion yuan.
The government’s swoop on Anbang marked its most aggressive step yet to rein in politically-connected conglomerates that grew rapidly and launched a wave of splashy multi-billion-dollar overseas investments fuelled by excessive debt.
The government of President Xi Jinping, who has dramatically strengthened his grip on power recently, has made cleaning up financial risks a top national priority.