Ex-chair of NCI sentenced for embezzlement

The former chairman of New China Life Insurance Co. has been sentenced to six years in jail for embezzlement.

The Beijing No.2 Intermediate People's Court announced Guan Guoliang's sentence March 1, four years after the insurance executive was arrested in November 2007.

Guan was accused of embezzling a total of 261 million yuan in company funds between May 2003 and October 2004. Prosecutors said the money was then diverted to investments made by his brothers.

The court found Guan guilty of embezzling 200 million yuan.

According to the local newspaper Beijing Youth Daily, prosecutors also said between June and August 2003, Guan misappropriated 3 million yuan from New China Life under the guise of business consulting fees for a company run by Ma Yue, who was also detained under suspicion of conspiring with Guan. But the court rejected the charges, citing inadequate evidence.

Guan set up New China Life in 1996 as the country's first joint stock insurance company, and ran the company for eight years during a period of rapid and often unfettered expansion in China's capital markets. In 2003, New China Life became the country's fourth-largest insurance company.

After Guan's removal as chairman in late 2006 and subsequent detention, New China Life underwent tumultuous managerial changes. In 2007, the government's Insurance Protection Fund stepped in by buying 38 percent of the firm's shares for 2.79 billion yuan. In late 2009, Central Huijin intervened by obtaining shares held by the insurance protection fund. Huijin then, along with the insurer's original external shareholders including Zurich Insurance and Baosteel, reshaped New China Life's corporate governance structure.

In December, New China Life launched initial public offerings in Shanghai and Hong Kong, raising US$ 1.89 billion.