A court in Shanghai on Thursday sentenced the former head of embattled state-owned conglomerate Anbang Insurance, which has now been seized by the authorities, to 18 years' imprisonment for fraud, and the embezzlement of corporate funds.
Wu Xiaohui, former chairman and general manager of Anbang Insurance Group, was handed the sentence at the Shanghai No. 1 Intermediate People's Court, which also confiscated 10.5 billion yuan (U.S. $1.7 billion) of his assets, official media reported.
"His illegal gains and relevant yields they generated will be retrieved," state news agency Xinhua quoted the sentencing statement as saying.
Wu was found guilty by the same court of using Anbang, which grabbed world headlines with its purchase of the Waldorf Astoria Hotel in New York in 2014, to raise 65.2 billion yuan (U.S. $10.3 billion) through the sale of insurance products beyond regulatory limits, as well as embezzling 10 billion yuan (U.S. $1.6 billion) from Anbang’s insurance fund.
At his trial in March, Wu initially contested the charges against him, but said in his closing statement that he understood and regretted the crimes and requested leniency.
Media commentators said that many questions remain unanswered about the case, however, and that the sentence is likely the result of high-level political negotiations behind the scenes.
"I don't think that his capitulation is really connected to the fraud charges at all," journalist Xu Xiang told RFA. "Perhaps something else is going on behind the scenes, something political."
"It should have been obvious what was happening from the time [the first fraud] ... took place, so where did the 65.2 billion figure come from?" Xu said. "Why did this fraud continue for such a long period of time?"
Chinese journalists have been prevented from carrying out any independent reporting of the trial, and news outlets are expected to run ruling Chinese Communist Party-approved copy published by Xinhua.
"Of course we only have the official syndicated version," a journalist surnamed Zhang told RFA. "There are certain things ... that can't be talked about; actually this guy is pretty mysterious."
Wu is married to Zhuo Ran, the granddaughter of late supreme leader Deng Xiaoping, a connection akin to revolutionary royalty among China's ruling elite. He has denied later rumors that the couple have divorced.
A political commentator surnamed Pan said the vagueness around Wu's fall is definitely deliberate, and is linked to his high-level connections.
"This was basically a behind-closed-doors operation; nobody reliable went to that courtroom and listened to the trial," he said. "And 18 years isn't too bad really. They said he took 65.2 billion yuan. Execution would have been too good for him."
Pan said Wu might have continued to be protected by his revolutionary connections, had he not made the mistake of trying to transfer assets overseas.
"If you start making massive transfers of assets overseas, then they are going to have to bring you down," he said. "But they also don't want to go into what he was up to before that, so they bring him down in a very vague and confused manner."
"This is a warning shot to [the Deng] family, no more. They only took a third generation son-in-law, after all," Pan said.
Third largest insurer
Wu, 52, hails from the eastern province of Zhejiang, and made his first fortune in automobile sales, setting up Anbang in 2004.
Anbang is China’s third largest insurer with 1.97 trillion yuan (U.S. $310.4 billion) in total assets, and recent reports by financial news service Caixin and The New York Times have exposed complex ownership patterns linking much of its assets to Wu and his wife.
Caixin's cover story “A Maze of Capital Leads to Anbang’s Aggressive Expansion” prompted legal threats and counter-threats amid strenuous denials from the company.
Anbang was banned from issuing any new financial products for three months in May by China's insurance regulator, which cited shoddy risk-management practices.
It is currently under management by officials from the China Insurance Regulatory Commission, the central bank and other financial bodies, which will restructure its ownership while keeping it open for business.
Reported by Wong Siu-san and Sing Man for RFA's Cantonese Service, and by Yang Fan for the Mandarin Service. Translated and edited by Luisetta Mudie.