Pages

Friday, March 30, 2018

Billions in B.C. assets caught up in high-profile Chinese fraud case

Billions in B.C. assets caught up in high-profile Chinese fraud case

Image result for Billions in B.C. assets caught up in high-profile Chinese fraud case
In this image taken from undated video footage run by China’s CCTV via AP Video, Wu Xiaohui, left, the former chairman of the Anbang Insurance Group, sits during a court session at the Shanghai No. 1 Intermediate People’s Court in Shanghai. ANONYMOUS / AP
China says the former chairman of Beijing-based Anbang Insurance Group defrauded mom-and-pop retail investors of more than US$10 billion and the company used that money to buy trophy assets overseas, including prime office towers in downtown Vancouver and a major B.C. seniors’ care company.
The allegation puts these B.C. deals, which each exceeded $1 billion, into the world of what is emerging as one of China’s biggest financial crime trials, with pundits trying to parse out Beijing’s desire to crack down on rising debt levels versus its political motivations for going after Wu Xiaohui and Anbang.Image result for Christine Duhaime, a Vancouver-based lawyer.
“It’s so interesting,” says Christine Duhaime, a Vancouver-based lawyer. “Goodness knows what it means for the Vancouver assets other than there will be a fire sale to get rid of them.”
She’s been watching Anbang’s activities in Vancouver since it first got the green light from the federal government in 2016 to buy the Bentall Centre office towers and retail mall in two transactions for over $1 billion, even though it wasn’t clear how Ottawa was able to tick off basic ownership questions about Anbang when no one else in the world could.
She also drew attention to the speed at which Anbang’s $1 billion-plus purchase of Vancouver-based Retirement Concepts, a seniors’ care company, was approved by the federal government in 2017, considering the layers of ownership and the sheer task of translating verifying supporting documents from Chinese to English. 
Now, the visual of what is being suggested by the Chinese government’s allegations against Wu and Anbang should be a wake-up call, according to Alesia Nahirny, executive director of Transparency International Canada.
Image result for Alesia Nahirny, executive director of Transparency International Canada.
Nahirny says she wouldn’t categorize Anbang’s funds as necessarily being illicit. That’s normally a description reserved for money that is tied to nefarious and organized crime, but she says it’s a problem if Anbang has been diverting funds into deals in Canada that it raised by aggressively promoting risky wealth-management products to unsophisticated investors in China.
“(Money from) practices that happen elsewhere is coming to us. We are connected to it. If we are not putting the proper measures in place, we are complicit,” says Nahirny.
Anbang has distanced itself from Wu’s trial in Shanghai court, but it’s fair to say dealmakers around the world are waiting to see what Anbang will sell. Musings began in 2016 when Wu was first arrested by Chinese authorities, and escalated when Beijing’s insurance regulator took over control of Anbang in February 2017
Image result for commercial real estate broker Jim Szabo
In Vancouver, commercial real estate broker Jim Szabo, vice-chairman at CBRE Ltd., who was involved with the sale of both the Bentall Centre property and the Fairmont Hotel at YVR to Anbang-related companies, said in an email that “with China putting in regulators, we only know what we have read in the press.”
While the B.C. government recently said it is asking questions about how care for seniors will be maintained at Retirement Concepts, Mike Old, co-ordinator of policy and planning for the Hospital Employees’ Union, said, “it’s prudent to prepare for fallout,” which could include Anbang “extracting revenue” by selling off some of its nursing homes or contracting out work.
“There has been a lack of transparency (for parties) on both sides of the Pacific. On that side, it has been for small investors. On this side, it’s average workers and seniors.” 

No comments:

Post a Comment

Comments always welcome!