Chinese banking and insurance watchdog has decided to take over four insurers and two trust firms for one year starting from July 17, according to a report by Reuters.
China Banking and Insurance Regulatory Commission (CBIRC) cited poor governance as reason for the takeover. The companies reportedly concealed information about their shareholder structures and ultimate owners.
Tianan Property Insurance of China, Huaxia Life Insurance, Tianan Life Insurance and Yi’an P&C Insurance are the four insurers seized by the regulator, while New Times Trust and New China Trust are the trust firms.
During the takeover period, these six financial institutions will operate and sell products normally, according to a statement from the CBIRC.
According to reports, the regulator assigned nine other financial institutions to supervise each of the seized companies’ daily operations. Their debt obligations and creditor rights will not be affected.
The regulator will reportedly conduct equity restructuring and introduce new investors to the two trust firms to help them enhance corporate governance.
The seizures represent assets amounting to more than CNY1.2tn ($172bn), according to Caixin calculations.
Meanwhile, the CSRC (China Securities Regulatory Commission) seized control of securities firms New Times Securities and Guosheng Securities and Guosheng futures, a futures brokerage.