Former head of insurer denies fraud
Print Edition
THE former head of an Shanghai insurance agency, who fled abroad last summer, denied accusation that she cashed in over 1 billion yuan (US$161 million) in an insurance commission fraud in court yesterday.
Chen Yi, 35, former managing director of Shanghai Fanxin Insurance Agency, and her boyfriend and alleged accomplice, Jiang Jie, 49, said they embezzled the cash from the company during the trial, which opened yesterday at the Shanghai No. 1 Intermediate People’s Court.
Chen argued she was not the brain behind the sales of unauthorized wealth management products by the company.
Both are also accused of causing over 800 million yuan in losses to the company’s clients in the case involving more than 1.3 billion yuan worth of wealth management contracts.
An investigation started after an anonymous tip-off was received by the China Insurance Regulatory Commission last year that from 2010 to 2012 Fanxin was selling 20-year term life insurance policies disguised as high-return short-term fixed-income investment plans. Both accused were alleged to be profiteering from hefty first-year insurance commissions.
Fanxin sold the wealth management products with promises of up to 10 percent annual return to over 4,000 investors. It is not clear how many of them were truly aware of the nature of their “investment target” when they entrusted Fanxin with their money.
She also tried to convince the court that her boyfriend Jiang, a 30-year insurance veteran she invited to join Fanxin in 2012, was not initially aware of any wrongdoing by the company.
It was the middle of 2013 when the company’s finances began to show discrepancies of tens of millions of yuan that Chen decided to escape and asked Jiang to join her.
After transferring nearly HK$50 million (US$6.5 million) to Hong Kong, they fled to Fiji in July 2013, taking 830,000 euros (US$1.1 million) in cash besides jewelry. They were arrested less than a month later.
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