Why the Chinese Government Now Controls an Iconic New York City Hotel

Though the government probably prefers to give up the insurer.

According to a Friday announcement from the China Insurance Regulatory Commission (CIRC), the agency will take over Anbang for at least a year. The agency added that the firm entered into illegal operations that could “threaten the company’s solvency.” Separately, Shanghai prosecutors are charging its beleaguered chairman, Wu Xiaohui, with alleged fraud and embezzlement.

The CIRC notes that it is now has “full responsibility” over Anbang, and will complete “equity restructuring.” CIRC official He XiaoFeng is expected to lead the takeover working group for Angbang. The agency added that Anbang is currently “stable.”

The takeover comes amid a multi-year corruption crackdown by the Chinese government, alongside another campaign targeting companies in the country that have taken billions in debt to fund a string of mergers and acquisitions.

Anbang, for instance, bought up the Waldorf Astoria in 2014 for about $1.95 billion—tallying up to $30 billion in deals for the insurance firm since that year. But that figure could have been even larger, had Anbang completed its $14 billion cash bid for Starwood in 2016 or another deal to acquire 666 5th Avenue—a property developed by Kushner Companies.

While those mega-deals put Anbang on the international radar—it also pushed the company further up on Beijing’s list of concerns. In June, law enforcement officers detained Xiaohui. Then in July, authorities told Anbang Insurance to exit its foreign investments—including the Waldorf.

Anbang, for its part, has denied any plans to put the storied hotel on the market. But reports are emerging that the Chinese government has held talks to offer the Waldorf back to the Blackstone Group, the private equity firm that had sold the hotel to Anbang in the first place.