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Chinese tycoon who sought stake in Kushner property faces scrutiny

BEIJING — Wu Xiaohui, the Chinese tycoon who was in failed talks with President Trump’s son-in-law, Jared Kushner, to buy into a skyscraper project in Manhattan, is fighting allegations of financial chicanery.

Xiaohui has threatened to sue a Chinese magazine that examined his company’s labyrinthine funding.

The Anbang Insurance Group, which Wu controls as president and chief executive, said Sunday that it would take legal action against Caixin Media and its editor in chief, Hu Shuli, after Caixin Weekly magazine questioned whether Anbang was as financially robust as the company claimed.

“Anbang’s shareholder structure is like a maze,” Caixin said in an article posted Saturday. It said Anbang’s meteoric growth and acquisitions raised suspicions of financial sleight of hand, including capital injections coming from companies linked to Wu.

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“The left hand has been helping the right hand to inflate capital,” the article said.

Anbang hit back with its own incendiary accusations. Caixin is a widely respected economics weekly, and its findings echoed an extensive report on Anbang by The New York Times last year.

But Anbang suggested Sunday that Caixin had published its report after failing to squeeze advertising orders and other contributions from Anbang.

According to Anbang, Caixin falsely claimed that Wu had married three times and “made a series of smears and slanders against our company’s legitimate business activities.” The marriage allegation appeared to refer to a report in Caixin in 2015.

Caixin responded to Anbang’s threat to sue with its own threat of litigation. On its website on Monday, Caixin said the suggestion that it took on Anbang out of vengefulness was “an attempt at framing with no basis in facts.”

“We strongly condemn the slander in the Anbang statement and reserve the right to take legal recourse,” Caixin said. A director of communications at Caixin, Ma Ling, declined to answer questions and referred to the online statement.

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Anbang was in talks with Kushner’s family company to pay $400 million for a stake in a flagship skyscraper on Fifth Avenue in Manhattan. Anbang bought the Waldorf Astoria hotel, a popular venue on the New York social calendar, in 2014 as part of a spree of acquisitions.

But the deal with Kushner’s company foundered in March, in the wake of growing controversy about a presidential in-law doing business with a Chinese conglomerate with many ties to Beijing’s political elite. Kushner has also become an influential White House adviser to Trump, including on China policy.

Caixin’s latest report on Anbang has been part of a burst of unwelcome attention for the company and Wu, which has thrown into doubt his business acumen and his reputation for political invulnerability.

“The level of detail that is provided in the article is, I think, relatively unique for any type of story of a Chinese company in Chinese media,” Christopher Balding, an associate professor at the Peking University HSBC Business School in the southern Chinese city of Shenzhen, said.

A lawsuit would pit a company that has recently appeared politically vulnerable against a magazine that has proved skilled at navigating censorship to report on corruption and financial shenanigans in China.

The controversy over Anbang has come while the Chinese Communist Party government under President Xi Jinping is seeking stability ahead of a leadership turnover later this year. But Xi also vowed in late April to rid China’s banks, insurers, and other financial companies of excessive risk.

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Last month, Xiang Junbo, the chief regulator of Chinese insurers, including Anbang, was put under investigation by party anticorruption investigators.

Wu’s family and personal ties are at the heart of the growing questions about Anbang, which he cofounded in 2004.

He has been a member by marriage of China’s political and business aristocracy: He married a granddaughter of Deng Xiaoping, the communist patriarch who oversaw China’s market reforms in the 1980s. Wu also came close to sealing a partnership with American political royalty through Kushner.