An embattled Chinese tycoon has stood up to Beijing by contesting all charges brought against him by the government.
A Chinese tycoon is (unusually) contesting fraud charges
Wu Xiaohui, the ex-chairman of financial conglomerate Anbang Insurance Group, was put on trial in Shanghai on Wednesday, a Chinese court said in an online announcement.
A former car insurance salesman, Wu made Anbang one of China’s most aggressive overseas dealmakers after he founded the company in 2004.
The group, which has over $300 billion in assets, has pursued high-profile takeovers including the $1.95 billion purchase of New York’s Waldorf Astoria hotel in 2014.
Wu also held talks with Jared Kushner in 2016 over a property project in New York City.
However, the once high-flying businessman was put under investigation in June 2017 as China launched a sweeping crackdown against what it calls risky financial behavior.
The No.1 Shanghai Intermediate People's Court, which has been posting live updates on his trial to social media, said the businessman has been charged of illegal fundraising, fraud and embezzlement.
Prosecutors allege that since 2011, Anbang has raised more $100 billion with fraudulent financial statements and breaches of risk management benchmarks.
The government also accused Wu of diverting more $10 billion to his personal company for debt repayment, overseas investments and personal spending.
After the charges were read, Wu raised objections to all of the accusations, the court said on the Twitter-like platform Weibo.
Wu stated that he does not understand the law, and does not know whether his acts constituted crimes, the court reported.
Christopher Balding, an associate professor at Peking University’s HSBC Business School, said companies like Anbang, which previously relied on high-cost borrowing, were prime targets of China’s campaign to reduce financial risk.
“A couple of years ago, Beijing was encouraging deals like the Waldorf Astoria one,” he said.
“It wanted to extend China’s influence, until it realized too much money was leaving the country.”
A spate of Chinese tycoons have been placed under investigation in recent months, but details of their alleged wrongdoing is still largely unknown.
Wu’s ongoing proceeding is expected to reveal more about the accusations against some of China’s richest people.
Last month, Chinese government stated it had seized control of Anbang, due to the prosecution of its former chairman.
The company remains in state hands.
Additional reporting by Viola Zhou.