A subsidiary of China's 200-billion-dollar sovereign wealth fund has received government approval to invest in a domestic life insurer plagued by an embezzlement scandal, Chinese media said Monday.
Central Huijin Investment Ltd., which is wholly owned by China Investment Corp., will buy 38 percent of New China Life from an arm of the industry's regulator, Caijing magazine said, citing unnamed sources close to the deal.
The price will be decided after the 2008 audit and appraisal reports of the country's fourth-largest life insurer are completed, it said.
The seller, part of the China Insurance Regulatory Commission, bought the stake in 2007 for 2.7 billion yuan (395 million dollars), a year after it opened an investigation into New China Life, the report said.
Guan Guoliang, the insurer's former chairman, went on trial in November on charges including involvement in the embezzling more than 261 million yuan, according to the magazine. A verdict is still pending.
Central Huijin, which often comes to the rescue of weak state companies, has injected hundreds of billions of dollars into firms including Industrial and Commercial Bank of China to shore up their balance sheets ahead of overseas listings.
China Investment Corp, which was set up to invest some of the nation's 1.9 trillion dollar forex reserves, has said it will avoid buying western financial institutions as they struggle with the impact of the global financial crisis.
Share This Article With Planet Earth
