Shares of Wanda tumble on rumours chairman detained

SHANGHAI, Aug 28, (AFP): Shares in the hotel chain of Chinese conglomerate Wanda plunged in Hong Kong to close 8.09 percent lower on Monday despite the firm dismissing as false reports that chairman Wang Jianlin had been barred from leaving the country.

Wanda and other Chinese conglomerates that made a succession of multi-billion-dollar overseas investments in recent years have been under official scrutiny for months as Beijing clamps down on capital flight and skyrocketing debt.

The obscure website Bowen Press reported on Sunday that Wang, one of China’s richest men, and his family were stopped at Tianjin airport on Friday as they sought to fly to London.

It said they were released after several hours but that Wang was told he could not leave China.

The Hong Kong-listed shares of Wanda Hotel Development Co dropped nearly 10 percent early on Monday.

The issue recovered somewhat as Wanda Group released a statement Monday saying that Wang had been the victim of “vicious rumours” about supposed restrictions placed on his movements.

“Wanda Group strongly reiterates that all of these rumours are utterly baseless and have ulterior motives behind them,” it added.

But the firm’s shares dipped again in the afternoon, closing 8.09 percent lower at HK$1.59 as Wanda’s denial apparently failed to completely allay investor concerns about the government crackdown on the conglomerate.

Wanda has diversified rapidly in recent years from commercial property into entertainment, theme parks, sports and other sectors, fuelled by a series of highprofile overseas acquisitions.

But it is now reportedly facing difficulty paying off debts run up in its buying sprees and has found itself in Chinese regulators’ sights.

Wanda, along with big conglomerates Anbang Insurance Group, Fosun International, and HNA Group, have seen their business practices come under intensifying Chinese government scrutiny this year as the ruling Communist Party clamps down on capital outflows to protect the yuan from weakening.

Wanda said in July it was selling off 77 hotels and several other tourism-related assets to Guangzhou-based R&F Properties in a huge deal worth $9.3 billion, and last week abandoned the planned 470-million-pound ($606 million) purchase of a plot of land in London.

Recent reports have said China plans to squeeze Wanda by cutting off new loans and regulatory approvals for deals, punishing it for breaching Chinese restrictions on overseas investments.