It operated for years under the radar, but its board boasted some impressive pedigrees.
Mr. Wu himself was a former car salesman and minor government official. But he had married a granddaughter of Deng Xiaoping, once China’s top leader and one of the most important figures in modern Chinese history. Other early Anbang directors included Levin Zhu, son of a former prime minister, and Chen Xiaolu, the son of a famous army marshal. In China, those are the kinds of connections that can help bring in business.
Who Owns Anbang?
In the years after it was founded, the names of Mr. Wu and some of the other early players disappeared from the company’s filings with Chinese officials. On paper, the company was owned by a number of individuals working through various holding companies.
In a 2016 investigation, The New York Times tried to find these individuals, who were not well known investors or famously wealthy people — even though their ownership stakes in Anbang would make them some of the richest people in China. It found that many of the people who owned the shares were family members or acquaintances of Mr. Wu. Addresses for some shareholders led to shabby buildings or to business that open shell companies.
It is common in China for wealthy people to own their property under the names of others, usually friends and family. Such arrangements are known in Chinese as baishoutao, or white gloves. Anbang has said it is owned by a number of shareholders who make their required disclosures to the government.
How Did It Get So Big?
Anbang still sells insurance policies. But in recent years it has begun selling investments that in China are called wealth management products.
Wealth management products are short-term investments that often offer fixed rates of return, usually at a considerably higher rate than bankers offer on run-of-the-mill savings accounts. They are often sold directly to individual, mom-and-pop investors looking for higher returns but less risk than China’s frequently unstable stock market offers.
The products are a common way for Chinese companies and others to raise money. But they have grown in volume to the point that many people consider them a potential threat to the stability of the financial system. They are also lightly regulated, and it often isn’t clear to investors where their money is going.
Anbang sold wealth management products heavily. In one six-year period, the assets of Anbang’s life insurance unit multiplied 2,876-fold, to $213 billion.
What Did It Buy?
The Waldorf Astoria gets the headlines, but Anbang bought much more.
Two years ago it agreed to buy a hotel business from Blackstone, the private equity group, for $6.5 billion in a deal that gave it hotels in New York, Chicago and San Diego, among other places. It bought Tongyang Life, a South Korean insurer, for $1 billion, and Vivat, a Dutch insurer, for about $170 million but pledged to inject as much as $1 billion more.
The biggest target was the one that got away. Anbang bid $14 billion to acquire Starwood Hotels and Resorts, which would have been the largest purchase of an American company by a Chinese buyer. Then, without explanation, Anbang backed off.
Why Did Anbang Get in Trouble?
About the time Anbang was bidding for Starwood, China began to take a hard look at its big deal makers.
China was coping with slowing economic growth and a flood of money leaving its borders. Amid that, officials began taking a hard look at the debts some of its companies were racking up, and criticizing some of the purchases they were making.
As the pressures mounted, Mr. Wu was detained last year by Chinese authorities, without explanation.