Beijing Takes Over Anbang, Insurer That Owns Waldorf Astoria

The regulator said that the takeover could extend a second year if the company failed to complete an equity restructuring and resume operations. It said the takeover would be capped at two years.

The Shanghai Procuratorate, which handles prosecutions in the city, announced in a statement on Friday morning that Mr. Wu, Anbang’s former chairman, had been indicted in the city’s First Intermediate People’s Court for fraudulent fund-raising and for improperly taking company assets.

Mr. Wu was once a major figure in Chinese business circles. He had married a granddaughter of Deng Xiaoping, China’s paramount leader in the 1980s and a towering figure in Chinese politics, and he was widely considered politically connected. But he was detained in June, suggesting that any political sway he might have once held had ebbed.

Beijing Takes Over Anbang, Insurer That Owns Waldorf Astoria
Beijing Takes Over Anbang, Insurer That Owns Waldorf Astoria

Mr. Wu also tried to extend his political ties into the United States. In November 2016, he met with Jared Kushner, the son-in-law and a top adviser of then President-elect Donald J. Trump, in a bid to buy a stake in a Manhattan office building partly owned by Mr. Kushner’s family company. The deal was eventually abandoned after media coverage.


Anbang Insurance Group offices in Beijing.Credit Rolex Dela Pena/European Pressphoto Agency

Mr. Wu was founder and chairman, but his name did not appear in Anbang’s corporate ownership records. Instead, it is owned on paper by a succession of shell companies controlled by a handful of obscure names. Such ownership arrangements are common in China, where the wealthy and politically connected often own properties under the names of others.

A New York Times investigation two years ago found that many of those owners were family or acquaintances of Mr. Wu, often hailing from his home region, in China’s Zhejiang province. Anbang has said it is owned by a number of shareholders who made the proper disclosures under Chinese law.

The takeover of Anbang will put the Waldorf Astoria, for decades a symbol of New York elegance, under the control of the Chinese government. In addition to hosting celebrities like Frank Sinatra and Elizabeth Taylor, for years it had been the lodging of choice for presidents and other world leaders.

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That changed in 2014, when Anbang said it would buy the hotel for nearly $2 billion. President Barack Obama declined to stay there over security concerns. The hotel is currently closed as it undergoes a renovations that will shrink the hotel and add condominiums.

The Waldorf Astoria purchase ushered in the rise of a new breed of Chinese deal makers. The companies, which also included Dalian Wanda Group, HNA Group and Fosun International, bought up everything from hotels to banks to movie production companies. Though the companies are privately owned, their leaders often benefited from their political connections, and they were often backed by cheap debt provided by China’s state-run banks.

The deals made the companies truly global players. For example, in a financial disclosure last spring, shortly before the police detention of its chairman, Anbang said that nearly three-fifths of the assets of its main business, life insurance, were overseas.

Property was a big focus for Anbang. In 2016, it spent more than $6 billion for a group of hotels in the United States, buying it from Blackstone Group, a private equity giant. That gave it marquee properties including the Westin St. Francis hotel in San Francisco, the Loews Santa Monica hotel in California and the Fairmont Chicago hotel.

Anbang also offered more than $13 billion for Starwood Hotels and Resorts before abandoning its bid in 2016, without explanation. By then, the Chinese deal makers had hit a wall.

China was shaken three years ago by a surge of money out of the country and concerns that its economy had been layering on too much debt. Anbang and the other Chinese deal makers, which had borrowed heavily to fund their shopping sprees, soon drew attention from officials. State media labeled them “gray rhinoceroses” — big problems that are ignored until they start moving fast.

Chinese regulators also began casting a critical eye over big spending in areas like real estate. Many of the companies, like Dalian Wanda and HNA, have since been selling assets to pay down debt.

Keith Bradsher reported from Beijing, and Alexandra Stevenson reported from Hong Kong. Cao Li in Hong Kong, Ailin Tang in Shanghai and Owen Guo in Beijing contributed research.

A version of this article appears in print on February 23, 2018, on Page B2 of the New York edition with the headline: Beijing Takes Over Insurer, And With It, The Waldorf. Order Reprints|Today’s Paper|Subscribe

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