The Chinese government seized control over Anbang Insurance Group Co., the Chinese insurance group that owns New York’s famed Waldorf Astoria hotel. China has also charged the company’s chairman with economic crimes, The New York Times reported.
Over the last several years, Anbang has been spending billions of dollars buying up a number of properties, including the $1.95 billion purchase of the Waldorf Astoria in 2014. In 2016, the chairman, Wu Xiaohui, met with Jared Kushner regarding a potential real estate deal that was eventually unsuccessful.
The China Insurance Regulatory Commission said in a statement that the government was taking over because of “illegal management and operation activities” that could put the company out of business.
“The takeover management team will take effective measures to keep the company operating as usual,” the Chinese insurance regulator said.
Chairman Xiaohui is being indicted for fraudulent fundraising and improperly taking company assets, according to a statement.
It is believed that Xiaohui is politically well-connected due to his marriage with a granddaughter of former leader Deng Xiaoping. Despite his connections, Xiaohui was detained last June.
In 2016, Anbang spent more than $6 billion in its acquisition of Strategic Hotels & Resorts from private equity company Blackstone. The company also offered more than $13 billion for Starwood Hotels and Resorts.
Anbang and other similar companies had been borrowing a lot of money to fund their large spending sprees, causing concerns in the Chinese government that they have been accumulating too much debt and their business structure was failing.