Beijing-based financial company Tongchuangjiuding Investment Management Group (Jiuding) is reportedly looking to sell around 20% to 40% of its holdings in Hong Kong-based FTLife Insurance Company.
Jiuding is under pressure from Hong Kong’s insurance regulator following the company’s involvement in a mainland government investigation for alleged violations of securities laws, reported Chinese financial portal Caixin.
The Insurance Authority has questioned whether Jiuding is eligible to own 100% of FTLife, which it acquired from Belgian insurer Ageas in May 2016 for almost US$1.36 billion.
The Hong Kong regulator has the right to deny authorisation to operate an insurance business in the city if the organisation or person exerting control on the business is deemed as not “fit and proper.” According to the report, an entity may lose its “fit and proper” status is if it “has been the subject of an investigation conducted by any regulatory authority in Hong Kong or elsewhere.”
In March 2018, Jiuding announced that it is under investigation by the China Securities Regulatory Commission for suspected violation of securities laws. This caused the value of Jiuding’s shares to plunge by around 75% in two days.
The investigation seeks to uncover whether the company had engaged in market manipulation and other illicit activities in its previous share transactions and fund raisings.
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