Zurich Insurance denies it bought into Chinese firm illegally

Global insurer Zurich Insurance has denied violating Chinese laws following recent accusations that it bought shares of a Chinese insurance company, years before foreign companies were allowed to do so, with the help of the daughter of former premier Li Peng.

In a written reply to the yesterday, Zurich said when it reached an agreement with Orient Group, a privately owned Chinese conglomerate, in 1996 to buy 10 per cent of shares of an insurance company that it owned, the agreements specified that the shares would remain with the Orient Group until restrictions on foreign shareholding in life insurance companies under Chinese law were lifted.

"Based on a legal review conducted by Zurich, Zurich did not violate any laws or regulations existing at the time of these events," it said, adding the profit it reaped from selling some of the shares later were "consistent with the strong performance of the Chinese economy and stock market over the past decade".

It also said its acquisition of shareholdings in New China Life commencing in 2000 were "entirely unrelated to the transaction with the Orient Group".

Li Xiaolin also publicly denied allegations that she had brokered the deal by introducing executives from Zurich in 1995 to three Chinese businessmen who held a majority stake in New China Life, the country's largest private insurance company.

Li, who now heads China Power International Development (CPI), a mainland power-producer, issued the statement through CPI's official Weibo account on Friday, calling the allegation a "vicious slander".

"Li Xiaolin never knew any people from insurance companies, nor did she have personal relations with any insurance company," the statement said.