Hall of Shame


Cninsure (CISG US)

Year: 2010

CNinsure (now known as Fanhua, Inc.) operates an independent insurance agency and brokerage company. The Company provides wealth management, property, casualty, and life products, as well as consumer finance, insurance claims adjusting services, such as damage assessments, surveys, authentications, and loss estimations.

In Dec 2010, OLP Global issued a report, alleging that the company have understated commission expenses and overstated net income as a result of the way the company incentivises its agents, which the report said is "no different from an equity-based compensation plan." The company claimed that the incentives given to its agents "should not be recognised as costs", which is in contradiction to U.S. GAAP, as those incentives are reasonably likely to be tendered at a future date.

OLP raised questions about the acquisition practices of the company. The company acquired an e-commerce platform, InsCom,  in Jul 2010 for RMB 84m. However in Dec 2010, the company's head of P&C business acquired InsCom for only RMB 28,500.

US District Court: Legal Document, 17 Oct 2011

StreetInsider: OLP Global Highlights More Red Flags On CNInsure, 13 Apr 2011

CNinsure: Annual Report 2010