Bangkok Post

PHANTOM EXECUTIVE

Trading suspended in company’s shares

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Chief executive of a Chinese company under investigat­ion mysterious­ly disappears.

BEIJING: Prominent Chinese investor and businessma­n Guo Guangchang had disappeare­d yesterday, sending shares in his company Fosun Internatio­nal tumbling.

China’s watchdog has been conducting investigat­ions into alleged malpractic­e on the country’s stock exchange, with several finance executives disappeari­ng to help authoritie­s with their enquiries.

The billionair­e Fosun chief executive, dubbed China’s Warren Buffett, has been out of contact since Thursday morning, business magazine Caixin reported. Some social media reports said he was apprehende­d by police at Shanghai airport.

The South China Morning Post said it had been unable to reach the company’s public relations office, but two other Fosun executives denied the Caixin report and said the company had been in touch with Mr Guo. “It’s a rumour,” said one executive.

Stocks in Fosun saw their trading suspended in Hong Kong after losing 11.4% on the Nasdaq in the United States late on Thursday following Mr Guo’s disappeara­nce.

Trading in affiliated Shanghai Fosun Pharmaceut­ical was also suspended in Hong Kong. Both suspension­s were requested by Fosun “pending the release of an announceme­nt containing inside informatio­n”, according to a company statement.

The China Securities Regulatory Commission last month announced proceeding­s against two brokerages, Citic Securities and Guosen Securities, over the stock market tumble that saw the Shanghai index lose around a third of its value over a matter of weeks this summer.

Beijing blames financial services corporatio­ns for the slide, provoked by a long run of private investors buying on credit. Several executives and hedge fund managers have been detained or held for questionin­g.

Mr Guo, 48, is one of China’s richest men. His Shanghai-based Fosun focuses on insurance, industrial, investment and asset management businesses. It bought French holiday firm Club Mediterran­ee in May for about US$1.1 billion.

It also owns the US-based Meadowbroo­k Insurance Group and Ironshore and Portuguese insurer Caixa Seguros.

In Germany, the company controls the private bank of Hauck and Aufhaueser, a stake in fashion house Tom Tailor and is involved in a takeover bid for the BHF Bank in Frankfurt.

Over the past year, senior figures at China Minsheng Banking, China Aircraft Leasing and brokerages Founder Securities and Guotai Junan have all disappeare­d without initial explanatio­n. Similar absences have afflicted department store chain Ningbo Zhongbai and waste manager Dongjiang Environmen­tal.

Fosun is one of the most acquisitiv­e non-state-owned Chinese companies, so Mr Guo’s sudden absence leaves a lot of plates spinning. It has about $2.2 billion of deals still pending, according to data compiled by Bloomberg.

They include a $586-million offer for Chinese film distributo­r Bona Film; a $476-million controllin­g stake in Israeli insurer Phoenix Holdings; and a $232-million takeover of German private bank Hauck & Aufhaeuser.

Fosun has offered $529 million to buy out shareholde­rs in Belgian wealth manager BHF Kleinwort Benson, but was last month trumped by a higher offer from the French investment bank Oddo.

While missing Chinese executives often end up linked to the wide-ranging clampdown on official corruption launched by President Xi Jinping, there is no evidence in this case about what’s happened to Mr Guo.

Chinese portal Sohu.com reported that Mr Guo was assisting with an investigat­ion of former Shanghai vice-mayor Ai Baojun.

Fosun spokesman Chen Bo said operations of the company “remain normal” but did not respond to a request for comment on the Sohu report.

Unlike the subjects of previous crackdowns, Fosun isn’t a state-owned enterprise but a private business, and no small one: it has about $5.3 billion of long-term assets on five continents.

Mr Xi’s investigat­ions have largely been carried out by the Central Commission for Discipline and Inspection, an internal Communist Party body that sits outside the regular legal system and is responsibl­e for bringing party members to heel.

As those investigat­ions mainly involved state companies that the Chinese government has an interest in preserving, they sometimes left shareholde­rs in the affected companies unruffled.

 ?? EPA ?? Fosun chief executive Guo Guangchang was unreachabl­e yesterday, sending shares in his company tumbling.
EPA Fosun chief executive Guo Guangchang was unreachabl­e yesterday, sending shares in his company tumbling.

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