Newspaper apologizes for false report

Southern Weekly claimed political ties fueled Anbang Insurance's growth

An outspoken newspaper in the southern China metropolis of Guangzhou publicly apologized on Monday to a Chinese insurance company for implying that powerful political connections fueled its rapid growth.

In a report published on Thursday, the Southern Weekly said Chen Xiaolu, the son of the late General Chen Yi, one of the founders of People's Republic of China and a former prominent military commander of the Communist Party of China (CPC), is the de facto head of the Anbang Insurance Group.

The report said that Chen Xiaolu owns more than 51 percent of Anbang through three private companies he has shares in, namely, the Shanghai Standard Infrastructure Investment Group, Zhejiang Standard Infrastructure Investment Group and Jiaxing Road Construction Investment, making him the real power behind Anbang.

The report also said that Wu Xiaohui, the group chairman, had married the granddaughter of late leader Deng Xiaoping, and hinted that powerful connections like these have contributed to the company's unusual expansion in recent years. Anbang's total assets stood at 700 billion yuan ($112 billion) and the insurer's equity investments could top 200 billion yuan.

Anbang set up 10 subsidiaries within five years and its registered capital increased to 61.9 billion yuan from 500 million yuan within 10 years, according to the Beijing Administration for Industry and Commerce.

Caixin, a Beijing-based financial and business news outlet on Monday quoted Chen as saying that he owned no shares of Anbang and only served as a consultant. He said he had been a business partner of Anbang Chairman Wu Xiaohui for 15 years, but was not involved in company operations.

The Caixin report also said that Wu has divorced Deng's granddaughter.

Following a similar denial made by Chen on the social media app WeChat earlier on Thursday, the Southern Weekly on Monday issued an apology on its website saying that their report on Anbang contained "inaccurate information." The paper, however, did not specify which part of their report contained errors. The Beijing-based Anbang, which offers insurance and asset management services, was founded in 2004 by seven companies including the state-owned Shanghai Automotive Industry Group and Sinopec. The insurer has come under the spotlight over several large acquisitions both in China and abroad, most notably for its $1.95-billion purchase of New York's famed Waldorf Astoria Hotel.

The insurer said Monday on its website that it has officially received the green light for its purchase from the US Committee on Foreign Investments.

Domestically, Anbang in January raised its stake in China Minsheng, the country's biggest private lender for the ninth time in the last three months.

In December, Anbang became the largest shareholder of China Minsheng Banking Corporation, using a series of purchases to take a 17.16 percent stake. Caixin estimates the company paid 40 billion yuan.