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| Insurance Chairman Resigns in Financial Probe |
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The chairman of At a board meeting on Wednesday the insurer "approved the resignation of Chairman Guan Guoliang and named President Sun Bin as the acting chairman until a new chairman is elected," said a spokesman for the New China Life Insurance Company (NCL) on condition of anonymity. "This change will not hurt the company," he said. Guan, 46, has been under investigation by the China Insurance Regulatory Commission (CIRC) since September on suspicion of violating regulations on capital utilization. The investigation is focused on Guan's investments in real estate and other areas forbidden by the industry watchdog. "What is worse is that the board knows nothing about these investments," said a source close to the company who declined to be named. As early as February of this year there were media reports indicating PricewaterhouseCoopers (PwC), NCL's auditor in 2005, found the insurer provided an 800 million yuan (US$102.5 million) warranty for three companies in the first half of 2005 but didn't include it in its financial report. And there were no available written contracts for a 1.34 billion yuan (US$158 million) transaction between NCL and Chengzhong Real Estate Company. NCL's external auditors in 2004 and 2005, including PwC and Deloitte, had to delay their audit reports due to difficulty pinning down some of NCL's investments. Life insurers can't invest more than 5 percent of their total assets, and investments in the real estate sector are prohibited. "Guan Guoliang acknowledged his mistake and resigned under pressure from the insurance watchdog and the weight of public opinion," Xinhua News Agency quoted an insider as saying. Guan, a graduate of Dongbei University of Finance and Economics, was elected NCL chairman in 1998 when he was 38. His tenure was due to end on NCL was established in 1996 and is the country's fourth-largest life insurer after China Life Insurance, Ping An Insurance and China Pacific Insurance. With a registered capital of 1.2 billion yuan (US$154 million), NCL posted strong growth this year. Its premiums hit a record high of nearly 26 billion yuan (US$3.33 billion) by December 25 this year. This is up 24 per cent year-on-year. The company has 15 shareholders including some renowned state-owned enterprises and international big names in the insurance sector, such as Baosteel, Shenhua Coal, Zurich Insurance, IFC and ING. ( |
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