Prominent Chinese tycoon missing as anti-corruption crackdown widens

BEIJING - One of China's top entrepreneurs, the chairman of the conglomerate that owns Club Med and other businesses in Europe and the United States, is missing, a news report said Friday, a possible sign that an anti-corruption campaign is widening beyond state companies.

See Full Article

Fosun International employees were unable to contact Guo Guangchang after midday Thursday, the magazine Caixin said on its website. It cited messages on social media that Guo was last seen with police at an airport in Shanghai.

China is in the midst of a 3-year-old anti-graft crackdown led by President Xi Jinping that has snared dozens of executives at state-owned companies in oil and other industries. A court cited Guo in August as being linked to a supermarket chain chairman who was jailed for corruption.

A series of figures in China's securities industry have disappeared or been detained since August after authorities launched an investigation following a plunge in Chinese share prices in June.

Fosun, China's biggest privately owned conglomerate, and its pharmaceutical unit suspended trading of their shares Friday in Hong Kong. They cited the pending release of an announcement with "inside information."

Phone calls to Fosun's media and investor relations departments weren't answered.

If Guo is under investigation, that suggests authorities are extending scrutiny beyond state-owned enterprises, increasing uncertainty for investors, said Ronald Wan, CEO of investment banking at Partners Capital International in Hong Kong.

"A lot of companies will be on the investigation list and it will alert all the investors," he said.

Wan said the government should clarify Guo's status.

"If he is really getting caught in some sort of serious trouble, at least the group can have some sort of contingency plan and work out a solution to how the company can be run," said Wan.

Guo, 48, is one of China's biggest investors abroad. Fosun, which he co-founded in the 1990s, has businesses in real estate, steel, mining and retailing.

The Financial Times dubbed him "China's Warren Buffett" for following the legendary American investor's approach of using the cash flow from insurance operations to buy other businesses.

Fosun won a bidding war this year to take over Club Mediterranee, the French resort operator. Last year, it paid 1 billion euros ($1.1 billion) for Portugal's biggest insurance company, Caixa Seguros. In the United States, it owns Meadowbrook Insurance Group Inc., 20 per cent of insurer Ironshore Inc. and the 60-story office tower at 1 Chase Manhattan Plaza in New York City.

Guo has a net worth of $7.8 billion, according to the Hurun Report, which follows China's wealthy.

He denied earlier he was the target of a graft investigation.

A court in Shanghai said in August he had "inappropriate connections" with the chairman of a state-owned supermarket chain, Wang Zongnan, who was sentenced to 18 years, according to Caixin. The court ruled he misused 195 million yuan ($31 million) of Shanghai Lianhua Supermarket Holdings Co.'s money to help two other companies invest in real estate.

The court said Wang misused his position "to seek benefits for Fosun Group," according to Caixin. In exchange, the court said, Guo sold two villas to Wang's parents at low prices.

Fosun denied any impropriety and said the villas were sold at market prices.

In China's state-dominated economy, many entrepreneurs make deals with officials or state industry managers to gain government licenses, contracts or financing, said Zhang Tianyu, a specialist in corporate governance at the Chinese University of Hong Kong.

"This is how some entrepreneurs get into trouble once they have an anti-corruption campaign," said Zhang.

Zhang said that in a series of deals in Shanghai, Fosun has bought stakes of less than 50 per cent in state-owned companies but gained management control. He said that unusually favourable arrangement reduced the amount of capital Fosun had to tie up in the company while making it a partner of state managers.

"What we guess is that someone should be helping him to make these transactions," said Zhang. "Without more evidence, we don't know who this is. A politician, or maybe a group of people."

On Monday, China's biggest brokerage, state-owned Citic Securities Co., said it could not contact the two managers in charge of its China and international investment banking business.

In September, the police ministry announced Citic's general manager, Cheng Boming, and other executives were suspected of insider trading and leaking sensitive information.

Last month, Citic and two other brokerages, Guosen Securities Ltd. and Haitong Securities Ltd., said separately they were under investigation.

A star Chinese fund manager, Xu Xiang, was detained Nov. 2 on suspicion of insider trading, according to the official Xinhua News Agency.


Latest Canada & World News

  • Niagara police officer charged with assault; man seriously injured during arrest

    Canada News CTV News
    NIAGARA FALLS, Ont. -- The Special Investigations Unit says an assault charge has been laid against a Niagara regional police officer in relation to an arrest in August. The police watchdog agency says officers were sent to a drugstore in Niagara Falls, Ont. Source
  • Police arrest teen in alleged creepy clown assault south of Montreal

    Canada News CTV News
    ST-REMI, Que. -- Quebec provincial police say a teen dressed in a clown costume faces a charge of assault with a weapon after allegedly attacking someone. Police say Wednesday night's event seems to be linked to the phenomenon of creepy clown sightings that have been reported elsewhere in Quebec and across North America. Source
  • Duo nabbed in diamond-swapping theft, as police consider wider spree

    Canada News CBC News
    Jewellers across the country are being warned to check their stock for fake diamonds after a Toronto-area couple were charged in a daring diamond switch that could be connected to a string of similar heists nationwide. Source
  • 'Sniper of Mosul' taking out dozens of ISIS terrorists

    World News Toronto Sun
    ISIS’ top leaders are living in terror of a lone sniper who has killed dozens of jihadists in recent days. The unknown gunman - called the “Sniper of Mosul” - has ramped up his (or her) macabre workload as ISIS’ dreams of a caliphate are obliterated by coalition forces. Source
  • NDP pushes for pipeline inspection reports to be made public in Saskatchewan

    Canada News CTV News
    REGINA -- The Opposition is pushing the Saskatchewan government to release information about oil pipeline inspections. NDP environment critic Cathy Sproule says she asked to see all inspections done on Husky pipelines since 2011, but the request was denied because the government is still investigating an oil spill from a Husky pipeline in July. Source
  • Partisan Twitter bots distorting U.S. presidential candidates' popularity

    World News CBC News
    @loserDonldTrump wasn't born yesterday. It was actually the day before. Just after 3 p.m. ET on October 18, the baby bot burst into the Twitterverse. Someone, somewhere, who is clearly not a fan of the Republican presidential nominee, wrote a piece of code for a Twitter account that would fill people's feeds with anti-Trump messages. Source
  • Postmedia reports quarterly loss of $99.4 million on steep declines in print advertising

    Canada News Toronto Sun
    TORONTO — Postmedia Network Canada Corp., Canada’s largest newspaper company and the owner of this paper, says it intends to reduce staffing costs by 20% after it reported steep declines in revenue and print advertising in the fourth quarter of 2016. Source
  • Woman charged in unsolved 1989 killing

    World News CTV News
    KANSAS CITY, Kan. -- A woman has been charged in the death of a 19-year-old woman whose body was found nearly 30 years ago in Kansas City, Kansas. The Wyandotte County District Attorney's office said in a release Thursday that 48-year-old Carolyn J. Source
  • Trudeau’s electoral reform: They love me not, they love me

    Canada News Toronto Sun
    OTTAWA — Sometimes our prime minister can be so precious that his words can suck the air out of a room. It is breathtaking. As long as Justin Trudeau owns the ball, and he can take that ball home whenever he desires, then it would appear everything in Trudeauland is just hunky-dory. Source
  • Man allegedly choked stranger's baby at Walmart

    World News Toronto Sun
    A man in Kansas City is in custody after allegedly choking a stranger’s baby, according to CBS affiliate KCTV. The incident took place at a Kansas City-area Walmart, where 40-year-old Oleh Zhownirovych,who is now in custody, walked up to a woman who was waiting to check out items and began choking her baby, said the report. Source