China tightens grip with Anbang takeover as toxic debt risks lurk
Shanghai — Beijing’s unprecedented takeover of private insurer Anbang confirms that toxic risks lurk in the world’s second-largest economy while signalling the state’s tightening grip on China Inc despite reform rhetoric, analysts said. Government regulators seized control of the Anbang Insurance Group on Friday, saying that its debt-fuelled foreign acquisition binge left the company in financial peril and that high-flying founder and former chairman Wu Xiaohui would be prosecuted for fraud. The takeover, to last at least a year, was the most striking step yet by regulators to rein in dizzying debt levels and a clear sign that the government saw something frightening in Anbang’s books. "This move has huge significance. If something went wrong with Anbang it would lead to massive bad loans in the financial system," said Beijing-based economist Hu Xingdou. China has moved aggressively over the past year to slam the brakes on companies like Anbang, which ran up gargantuan debts to fund...
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