Chinese commission bars 4th richest man for 10 years
Beijing, Feb 25 (IANS) The China Insurance Regulatory Commission has barred Yao Zhenhua, the fourth-richest man in the country, for 10 years for irregularities in the purchase of shares of a real estate firm, the media reported on Saturday.
Yao, founder of the financial conglomerate Baoneng, provided false information for the authorisation to increase the capital of its subsidiary insurance company Foresea Life, an operation that financed the acquisition of Vanke shares.
Following an investigation, the Chinese regulator concluded that Foresea Life did not use funds from its shareholders, as it had stated at the time, for the November 2015 capital increase, which allowed him to become majority shareholder in Vanke, unleashing a power struggle to control the real estate company, Efe news reported.
The Commission held Yao directly responsible for the erroneous information and decided to remove him from the presidency of Foresea Life and barred him from participating in the insurance industry over the next decade.
The insurance regulator also announced that from now on it will provide advice to improve the management of Foresea Life, a company that was already sanctioned in December for its involvement in the dispute over Vanke’s control.
The suspension of Yao from the insurance industry puts a brake on the rapid rise in the Chinese corporate world of a virtually unknown businessman and who in a few months clinched the fourth position in the Hurun (local equivalent of Forbes) list of China’s richest.
In addition, it also closes a chapter in the Vanke case, a long-standing dispute involving several major Chinese real estate companies which seemed to have been settled in January with the entry of the state group Shenzhen Metro Group as its second largest shareholder.
Chinese regulators are also looking into Vanke shares bought by Evergrande real estate in late 2016, making it the third largest shareholder, following methods similar to that of Baoneng’s and also through a subsidiary insurance company.