Reuters
Hong Kong

Shares in firms controlled by Guo Guangchang, one of China’s best-known entrepreneurs, were suspended in Hong Kong and the mainland after a financial magazine said the Fosun conglomerate had lost contact with its billionaire founder and chairman.
The report by online publication Caixin stoked speculation among company watchers and investors that the self-styled student of investor Warren Buffett may have become the latest high-profile Chinese businessman to be quizzed by regulators as part of a widespread anti-corruption crackdown by Beijing.
Caixin reported late on Thursday, quoting unidentified sources, that Fosun had been unable to reach Guo since noon local time on December 10. In a statement yesterday, Fosun International said it had requested a trading halt pending the release of an announcement, at an undisclosed time, containing what it described as “inside information”.
A Fosun International spokesman in Hong Kong told Reuters the firm was operating as normal, declining to comment on the report or Guo’s whereabouts.
If confirmed, Guo’s absence would make him the most high-profile of a string of senior executives of top companies found to have gone missing temporarily amid Beijing’s continuing crackdown, sending a strong signal about how serious China is about ramping up scrutiny of its financial sector.
CITIC Securities Co, China’s biggest brokerage, said on December 6 it wasn’t able to contact two of its top executives following media reports that they had been asked by authorities to assist in an investigation.
“Guo is one of the high-profile Chinese entrepreneurs and this incident will raise eyebrows among foreign regulators as Fosun has been aggressively expanding its global insurance footprint,” Sally Yim, senior credit officer with Moody’s Investors Service said. “But it is too early to say how this incident will impact Fosun’s operations,” she said.
The 48-year-old underlined his global ambitions earlier this year, closing a billion-dollar takeover of the French Club Med holiday resort chain. It also owns marquee real estate, including One Chase Manhattan Plaza in New York, bought in 2013 for $725mn.
Fosun, which has spent more than $30bn on foreign acquisitions, is now in the middle of a takeover battle to buy Anglo-German lender BHF Kleinwort Benson, as well as chasing other deals in Europe as part of its global expansion plans.
After the Caixin report was published, Fosun’s overseas depository receipts in New York fell 6.6% overnight in unusually heavy over-the-counter trading, according to Thomson Reuters data. Guo has built an empire of industrial companies, alongside a host of insurance, banking and asset management firms. He is a delegate to the Chinese People’s Political Consultative Conference and has amassed a personal net worth of $5.7bn along the way, according to Forbes.
Born poor in a rural village in the southeastern province of Zhejiang, Guo studied philosophy at the elite Fudan University in Shanghai before founding his first firm in 1992 alongside classmates as an information services company with 100,000 yuan ($15,495) in capital.
His business empire now ranges from Portuguese insurer Fidelidade – an acquisition closed in January this year – to slices of theatre company Cirque du Soleil and holiday operator Thomas Cook. Fosun International had total assets, spread across, insurance, health, steel, banking, worth $55bn at the end of June 2015.
In August this year, Fosun and Guo were named by a Chinese court in relation to a bribery case against Wang Zongnan, former chairman of state-owned Bright Food Group Co, who was sentenced to 18 years in jail.
State news agency Xinhua said at the time Wang’s parents had bought two villas in Shanghai developed by Fosun at below-market prices, and that Wang had used his position to seek benefits for Fosun. The latter said it had “never sought to inappropriately benefit” and had “never delivered benefits to Wang Zongnan”.
China watchers said any confirmation that Guo faces specific scrutiny from regulators would reverberate around the international investment community.
“Should Guo, well-known abroad, be found to be at the centre of a graft investigation, this would be a strong signal to the world that China is serious about its anti-corruption campaign,” said Alberto Forchielli, founder of private equity firm Mandarin Capital Partners with 20 years of experience in China.