Chinese insurer Ping An threatens to sue NYT
One of China's biggest insurance companies today threatened to take legal action against the New York Times for linking a key government decision benefiting the firm with the shareholdings held by relatives of Chinese Premier Wen Jiabao.
Ping An Insurance (PAI) Co of China Ltd in a statement said the NYT story alleging USD 2.7 billion wealth accumulation by Wen's relatives contained "serious inaccuracies, facts being distorted and taken out of context, as well as flawed logic".
PAI "will take appropriate legal action commensurate with the damage and adverse impact the media reports have caused to the company", it said. The NYT story said Wen's family had amassed massive wealth during his ten years in power and the biggest source revenue was the large stakes in PAI held by his relatives.
The story yesterday alleged that PAI Chairman Ma Mingzhe wrote in 1999 to Wen and subsequently met his wife who lobbied against the government move to split big companies.
The NYT alleged that following the lobbying, the government granted PAI a waiver from a requirement warranting large financial companies be broken up. Subsequently an investment vehicle reportedly controlled by Wen's relatives bought shares in Ping An at a significant discount, well before other investors could buy the stock, the report said.
After that, the company has become China's second-largest life insurer and Wen family's shareholdings went up. They were valued at $2.2 billion in 2007, the paper reported. NYT Spokesman Eileen Murphy said that the daily stood by its story. Foreign Ministry spokesman Hong Lei today declined to comment on the fresh allegations against Wen. Hong earlier described the allegation by NYT's first story on Wen's family amassing wealth as a smear campaign with ulterior motives.
The NYT story came as Wen, regarded as "Grandpa Wen" for his amiability, was about to retire after a decade in power. A law firm in Hong Kong acting on behalf of Wen's family subsequently denied the allegations and threatened to take legal action but nothing happened so far. Reports in the Hong Kong media later said the ruling
Communist Party has ordered an inquiry into the allegations at the behest Wen himself but there is no official word here about it.
Wen would formally relinquish his post in March next year following the recent leadership change in the Party. Current Vice Premier Li Keqiang is slated to succeed him.
