Prominent Chinese tycoon reported missing is involved in Chinese investigation

BEIJING -- One of China's top entrepreneurs, the chairman of the Fosun conglomerate that owns Club Med and other businesses in Europe and the U.S.

See Full Article

, is assisting Chinese authorities with an investigation, his company said, a possible sign that an anti-corruption campaign is widening beyond state companies.

Fosun International released a statement through Hong Kong's stock exchange on Friday evening after Chinese business magazine Caixin reported company employees were unable to contact chairman Guo Guangchang. The statement said the company understands Guo is "currently assisting in certain investigations carried out by mainland judiciary authorities."

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 had suspended trading of their shares Friday in Hong Kong.

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

Guo's situation 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.

Fosun's statement said Guo "may continue to take part in decision makings of the Company's major matters via appropriate means."

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

  • Blind woman robbed by stranger thanks Toronto for 'unbelievable' response

    Canada News CTV News
    A blind woman who said she was robbed by a stranger she bonded with during a bus trip from Sudbury to Toronto is overwhelmed by the outpouring of kindness since she shared her story with CTV News. Source
  • Police in Newfoundland defend national undercover operation aimed at sex trade

    Canada News CTV News
    ST. JOHN'S, N.L. - Police in Newfoundland and Labrador are defending a national police operation aimed at finding victims of human trafficking working in the sex trade. Last week, the St. John's Status of Women Counsel issued a hard-hitting statement about Operation Northern Spotlight, saying it should be stopped because it targets sex workers for interrogation whether on not they want to leave the sex trade. Source
  • Thrift store pulls wrist-cutting Halloween prop

    Canada News CTV News
    Talize has agreed to pull a Halloween prop depicting wrist-cutting from its thrift store shelves across Canada, after outcry over the item’s depiction of suicide. The stick-on costume accessory depicts two seemingly bloody gashes across the wrist. Source
  • Airline apologizes to bed bug-bitten travellers

    Canada News CTV News
    A B.C. family who says they were bitten all over by bed bugs on a flight to England is now getting an apology from the airline. New Westminister resident Heather Szilagyi, her seven-year-old daughter Molly and her fiancé, Eric Neilson, were on an overnight British Airways flight from Vancouver to London earlier this month, when Szilagyi says she noticed bed bugs on the seat in front of her. Source
  • 8 students suspended after brawl near high school caught on video

    Canada News CTV News
    Eight students have been suspended and 30 others were sent home in the aftermath of a violent fight near an Ottawa high school this week, CTV News has learned. The brawl occurred between several students in a park near St. Source
  • Homeless B.C. nomads pitch tents at tony Oak Bay park after week at city hall

    Canada News CTV News
    OAK BAY, B.C. -- A nomadic group of homeless people has chosen one of Canada's wealthiest communities to pitch some tents and draw attention to housing shortages for disadvantaged people across British Columbia. The latest location for the wandering group of 15 people is Willows Park, a seaside recreation area in the Victoria suburb of Oak Bay, known for its tea rooms, elderly population and turn-of-century mansions worth millions. Source
  • Families of fallen have mixed experiences with Trump, if any

    World News CTV News
    WASHINGTON -- Some got sympathy and solace. Some got silence. One got a promise of cash. Relatives of people who died in military service have recounted varied interactions with U.S. President Donald Trump in the difficult days and weeks after their loved one's death. Source
  • Tourists wonder if they were also victims of Cuba sound attack

    World News CTV News
    CHARLESTON, S.C. -- Chris Allen's phone started buzzing as word broke that invisible attacks in Cuba had hit a U.S. government worker at Havana's Hotel Capri. Allen's friends and family had heard an eerily similar story from him before. Source
  • Spain ready to revoke Catalan autonomy amid independence bid

    World News CTV News
    BARCELONA, Spain -- Spain's government on Thursday immediately rejected a threat by Catalonia's leader to explicitly declare independence unless talks are held, calling a special Cabinet session for the weekend to activate measures to take control of the region's semi-autonomous powers. Source
  • Pakistani court indicts former PM Nawaz Sharif on corruption charges

    World News CBC News
    A Pakistani court on Thursday indicted former Prime Minister Nawaz Sharif as well as his daughter and son-in-law on corruption charges stemming from documents leaked from a Panama law firm. A lawyer for the 67-year-old Sharif, who is currently in London, where his wife is receiving medical treatment, entered a plea of not guilty. Source