Investor in Panama Canal takes a knock

THE CHINESE billionaire using his personal fortune to help fund a $50 billion (R686bn) Nicaraguan challenger to the Panama Canal has crashed into the bitter reality of equity markets in the world’s second-largest economy.

Telecoms entrepreneur Wang Jing was one of the world’s 200 richest people with $10.2bn at the peak of the Chinese markets in June, according to the Bloomberg Billionaires index. His net worth has since fallen to $1.1bn.

His 84 percent drop so far in 2015 is the worst recorded by the index, which provides a daily ranking of the world’s 400 richest people. Ivan Glasenberg, the chief executive of Baar, Switzerlandbased Glencore, had the secondbiggest percentage decline, falling 66 percent to $1.8bn.

Wang owns 35 percent of publicly traded Beijing Xinwei Telecom Technology Group, which has tumbled along with China’s equity markets. The end of a lock up on 51 percent of its shares on September 10 triggered a further decline that’s pushed Xinwei to a 57 percent drop this year. He pledged Xinwei shares valued at $2.4bn in July that were removed from his net worth calculation.

Dollar decliners

Behind Wang and Glasenberg are Hong Kong casino operator Lui Che-Woo and Mexican retailer Ricardo Salinas, who have both fallen almost 47 percent. To date, the year’s biggest dollar decliners are the world’s third- and fourthrichest people. Carlos Slim, No 4, has lost $14.2bn, or 20 percent of his net worth. Warren Buffett is down $12.5bn, a 17 percent fall. The 400 billionaires on the index have lost 4.2 percent of their combined net worth this year.

HKND Group, Wang’s closely held development company, was awarded a 50-year concession for the 274km canal by the government of President Daniel Ortega in 2013. The billionaire said in a December 2014 televised press conference in Nicaragua that he was committing personal funds to the project, and he has poured about $500 million of his own money into it so far, Peng Guowei, an executive vice-president at HKND, told Chinese state media Xinhua on September 7.

“The turn of fortune in Mr Wang’s financial resources will impact how and whether the canal can and will be built,” said Daniel Wagner, the chief executive of Country Risk Solutions and a former country risk manager at General Electric. “I would expect, given this year’s financial gyrations in China, that the government is also asking itself whether the canal is a viable proposition.”

The company said that despite the economic setbacks and local protests against the canal’s construction, the project was moving forward. – Bloomberg