China takes over Anbang Insurance, prosecutes ex-chair

China took over Anbang Insurance Group for a year on Friday and said its former chairman faces prosecution for "economic crimes" as the government stepped up its battle against corruption and excessive corporate debt. The China Insurance Regulatory Commission said Anbang, which emerged from obscurity in recent years to make a number of high-profile foreign acquisitions, had violated insurance regulations, "severely" impairing its ability to pay back debts. The highly unusual takeover appeared to signal deep official unease with Beijing-based Anbang's financial stability as well as the government's resolve in addressing a debt crisis that has spurred warnings of a potential financial contagion in the world's second-largest economy. The announcement clarified the fate of Anbang's chairman Wu Xiaohui, who was reported by Chinese media to have been detained last June. The insurance regulator confirmed he was being "prosecuted for economic crimes". A separate statement by government prosecutors in Shanghai said Wu was being prosecuted for fraudulent fundraising and "infringement of duties". The government, worried about capital outflows and reckless accumulation of debt, has over the past year implemented a host of new measures to stem the flow of billions of dollars into what it has called "irrational" investments overseas. In particular, it has striven to bring to heel companies such as Anbang, Wanda Group, and Fosun, which have been responsible for some of the highest-profile foreign acquisitions. Anbang, established just 13 years ago, grew from a domestic seller of property insurance into a financial services powerhouse, making a name for itself abroad by buying the landmark Waldorf Astoria in New York for a record $1.95 billion in 2014. Anbang also made a $14 billion dollar bid for Starwood Hotels & Resorts Worldwide, but pulled out of a bidding war with Marriott. The company was also in aborted talks with Donald Trump's son-in-law and key adviser Jared Kushner to redevelop a Manhattan office tower, Bloomberg News reported last year. Bloomberg also has said Beijing had ordered Anbang to sell all of its overseas assets, though the company denied that. Anbang's website claims the group has nearly 2 trillion yuan ($315 billion) in assets.