The charges in court statements, which offer an unprecedented glimpse into Anbang’s inner workings, allege there was wrongdoing going back as far as 2007.
Wu ordered up fraudulent financial statements and used money raised from fraud for investment, debt repayment and personal use, the Shanghai No1 Intermediate People’s Court said in a statement yesterday.
Wu is the first executive to publicly go on trial amid a government crackdown on risk that has ensnared other companies in recent months.
Anbang burst on to the global scene in 2014 with the purchase of New York’s Waldorf Astoria hotel, for which it paid a record price at the time.
Much of its growth was powered by sales of short-term, high-yield products that the company used to fund purchases of long-term assets such as real estate - a duration mismatch that had long worried analysts and regulators.
The government’s charges against Wu centre around the sales of such investment products, which exceeded the amount approved by regulators by more than $115bn (R1.35trillion) over a six-year period.
Based on the amount cited, it is the biggest fund-raising fraud case ever in China, said Zhang Yaojun, a senior partner at Beijing Zhongwen law firm. Should he be convicted, “Wu will probably be sentenced to more than 10 years or lifetime imprisonment,” he said.
China’s government last month seized control of Anbang for at least a year and said it would prosecute Wu for alleged fraud, after he led a multiyear deal spree that spanned the globe.
Wu is also accused of wrongly transferring a combined 10 billion yuan from sales of insurance policies to his own industrial company in 2007 and 2011, without booking the transactions.
Wu disputed both the facts and the charges, saying he did understand the law and did not know if his behaviour amounted to crime, according to the court.