Vancouver Sun: Explain approving China firm’s $1-billion deal for B.C. retirement home chain

Explain approving China firm’s $1-billion deal for B.C. retirement home chain, Trudeau government told

There are growing calls for the federal government to release details on its approval of billion-dollar investments in B.C. by Anbang Insurance Group, a Chinese insurance company widely described as being secretive about its owners.

“Transparency of ownership is always a concern, and it’s a particular concern for this company,” said Don Davies, member of Parliament for Vancouver-Kingsway and NDP health critic.

Last week, the Trudeau government approved the sale of Vancouver-based Retirement Services to the Beijing-based conglomerate.

Cedar Tree Investment Canada is Anbang’s vehicle with a Vancouver law firm’s address for what is thought to be a deal in excess of $1 billion. At that size, it was subject to a full review under the Investment Canada Act, which demands scrutiny of all deals of $600 million and up.

Even for smaller deals, it’s believed a foreign investor must reveal details such as the names of its board members, five highest paid officers, any person or entity that owns 10 per cent of its equity or voting interests, whether it is connected to a foreign government and its sources of funding for the investment.

Anbang, however, has infamously developed a reputation in the last year or so for much larger deals in the U.S. and Europe that fall apart because it can’t provide this kind of information about its ownership. Major investment banks have stepped away from earning potentially lucrative fees by working with Anbang for similar reasons.

The New York Times has dug into who is behind the company’s chairman, Wu Xiaohui. Investigations into remote villages across China and sometimes empty city offices unearthed a fuzzy picture of almost 40 shell companies, mostly owned by his wife, Zhuo Ran, the granddaughter of former Chinese leader Deng Xiaoping, and Chen Xiaolu, the son of a notable Chinese general, plus a few Chinese government-owned companies.

Davies, who brought questions about the deal to question period in Ottawa last week, said: “As a federal politician, there is the health perspective (related to Retirement Services’ delivery of care to seniors) but also the Investment Canada review process having a lack of transparency is totally unacceptable. It’s been that way for years through Liberal and Conservative governments.”

“There is no meat on the bones when it comes to discussing net benefits (for Canada). The process of reviewing these (deals) should be laid bare.”

Davies was not satisfied with Trudeau’s answer that global investment brings benefits to Canada and said “all investment is not the same. Productive investment impacts industry, provides jobs and there is an economic effect.”

Saying that Anbang has no plans to create additional jobs, Davies sees Anbang’s investment more as an “asset transfer.”

Anbang has closed one significant deal in Vancouver, buying Bentall Centre in downtown Vancouver for just over $1 billion. Even though the purchase was structured over two transactions, one of them was over $600 million. When Postmedia tried to get details of Investment Canada’s review ahead of green-lighting this, a reply to a request under the Access to Information Act included some links to general media stories about Anbang and a note explaining that some information is classified as being “privileged” and that “an examination of the records has revealed that some of the information is subject to section 36 of the Investment Canada Act and, therefore, entirely exempt …”

Asked for clarification, a government spokesperson, who did not have permission to be named, quipped: “That means it’s Fort Knox.”

Anbang is also believed to own the Fairmont Vancouver Airport hotel. Last June, Toronto-based InnVest bought it for $90 million. Major American news outlets reported last May that Bluesky Hotels and Resorts Inc, which described itself as a Canadian-based company backed by Hong Kong capital, bought InnVest using a negotiator that was actually representing Anbang, which denied there was any connection between it and BlueSky.

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