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.



Advertisements

Latest Canada & World News

  • 2 teen girls in custody after missing woman found dead in Manitoba First Nation

    Canada News CTV News
    FORT ALEXANDER, Man. -- Two teenaged girls have been charged in the death of a woman reported missing in Manitoba. RCMP say a 19-year-old woman from Powerview was last seen on Saturday. Police started searching on Sunday after she was reported missing and got a call later that day about a dead woman near a residence in the Sagkeeng First Nation. Source
  • P.E.I. says it's top in Canada when it comes to recycling and composting

    Canada News CTV News
    CHARLOTTETOWN - When it comes to recycling and composting, residents of Prince Edward Island can now boast they're the best in Canada. The P.E.I. government is citing newly released figures from Statistics Canada that show the province keeps more waste out of landfills, per person, than anywhere else in the country. Source
  • Sexual assault survivors to get free legal advice under new N.L. program

    Canada News CTV News
    ST. JOHN'S, N.L. - Sexual assault survivors can obtain free, independent legal advice under a new program in Newfoundland and Labrador funded by the federal government. Federal Justice Minister Jody Wilson-Raybould was in St. Source
  • Dancing humanoid robot rolls in to Calgary banks

    Canada News CBC News
    The next time you walk into an ATB branch, you could be greeted by a four foot tall, dancing humanoid robot named Pepper. The companion robot, created by Softbank Robotics America, is the first of its kind capable of recognizing human emotion, and this is Pepper's first foray into the Canadian market. Source
  • Witness chokes back tears describing hit-and-run death at Calgary gas station

    Canada News CTV News
    CALGARY -- A woman who witnessed the hit-and-run death of a Calgary gas station worker in 2015 choked back tears Tuesday as she described the incident. Joshua Cody Mitchell, 22, is on trial facing several charges including second-degree murder in an incident at a Centex gas station in June 2015. Source
  • Deported illegal accused of raping sleeping girl, 9

    World News Toronto Sun
    An illegal Mexican immigrant who was booted from the U.S. 16 years ago is accused of sneaking back into the country and raping a nine-year-old girl as she slept. Cops say Santiago Martinez-Flores, 48, broke in through the little girl’s window in Clackamas, Oregon and sexually assaulted her. Source
  • United ranked worst for customer satisfaction

    World News Toronto Sun
    United Airlines was hitting turbulence with customers even before its spectacular PR debacle in Chicago two weeks ago. A new survey from the American Customer Satisfaction Index (ACSI) of frequent fliers ranked the airline as worst among its peers. Source
  • Wild bison calves born in Banff National Park 'a huge step' to reintroduction

    Canada News CBC News
    Bison recently introduced into Banff's backcountry are settling into their new homes by welcoming new offspring to the herd. Parks Canada says it's the first time wild bison calves have been born in Banff's backcountry in 140 years. Source
  • Cops thwart death plot against Sun columnist Tarek Fatah

    Canada News Toronto Sun
    Toronto Sun columnist Tarek Fatah was on an ISIS hit list because of “contentious issues related to Islam”, the Times of India reports. Cops in India say two terror suspects were arrested last week before they could get guns from an ISIS mole in Mumbai and make their sinister plot a reality. Source
  • B.C. players scramble after University of North Dakota cuts women's hockey

    Canada News CBC News
    Last year, Alyssa MacMillan got an offer she couldn't refuse — a chance to play hockey at the University of North Dakota. The Penticton native knew better than most what she was signing up for, having watched older brothers Mitch and Mark suit up with the men's Fighting Hawks (formerly Fighting Sioux) in hockey-mad Grand Forks. Source