Wu Xiaohui sentenced 18 years imprisonment

According to The Associated Press, a Shanghai court sentenced Wu Xiaohui, the former chairman of Anbang Insurance Group, to 18 years in prison after he pleaded guilty to fraudulently raising billions of dollars from investors.

Shanghai’s Intermediate People’s Court ordered the confiscation of 10.5bn yuan (US $1.6bn) in assets from Wu who has been accused of misleading investors and diverting money for his own use.

According to Xinhua, Wu concealed his ownership of shares in companies controlled by Anbang, filed false statements with financial authorities and attracted investors by offering rates of return above that offered anywhere else.

Xinhua’s stated that he used over 100 companies under his control to manage funds and authorities later recovered bank savings, real estate and other assets. Wu misappropriated 10bn yuan ($1.5bn) in Anbang’s deposits.

Xinhua said the court calculated the years of the sentence according to the facts of the case, the severity of the crime, and its ‘degree of social harm.’

Anbang said it was receiving a $9.6 bn bailout from the government, meaning the government fund owns 98% of the company. This eliminates most of the equity stake once held by Wu and other shareholders.

The company is currently being controlled by a committee of officials from China’s insurance regulator, central bank and other agencies.