Fosun Group

Is China’s Warren Buffett, Guo Guangchang, under arrest? Trading of stocks suspended as Fosun chairman ‘uncontactable’

Fosun Group chairman said to have gone missing amid conflicting reports over corruption crackdown claiming another bigwig

PUBLISHED : Friday, 11 December, 2015, 12:02am
UPDATED : Friday, 11 December, 2015, 7:11pm

Speculation swirled over the fate of one of China’s most powerful tycoons, Fosun Group chairman Guo Guangchang, amid reports that he cannot be contacted.

Citing unidentified sources, mainland news outlet Caixin last night reported that the conglomerate could not contact Guo, dubbed China’s Warren Buffett, since noon and that it was still unknown whether he was detained on corruption charges or was assisting in probes into others.

UPDATE: Missing Fosun billionaire ‘allowed calls’, as company prepares announcement on disappearance of ‘China’s Warren Buffett’

Fosun International chief executive Liang Xinjun said in a Wechat group chat that senior executives were “handling the emergencies”, without elaborating, said a source at Fosun.

Calls made by the South China Morning Post to Fosun’s branding director Chen Bo and public affairs head Li Haifeng went unanswered. But two Fosun executives told the Post that the Caixin report was inaccurate and the company had reached Guo.“It’s a rumour,” said a Fosun executive who declined to elaborate, while another pointed out that it was unlikely that a man of Guo’s stature would be apprehended at the airport.

READ MORE: The making of tycoon Guo Guangchang

As news of the apparent disappearance broke on Friday morning, stocks of Fosun International and Shanghai Fosun Pharmaceutical suspended trading. Hong Kong listed Fosun International is the parent company and investment arm of Fosun Group. Subsidiary Shanghai Fosun Pharmaceutical is dual-listed in Shanghai and Hong Kong.

Mainland Chinese social media was abuzz with posts all day of Guo being handcuffed and whisked away after landing in Shanghai from Hong Kong.

A well-connected businessman, who cannot be identified, told the Post that Guo could be interrogated for his relationship with either Yao Gang, a vice-chairman of the China Securities Regulatory Commission, or Ai Baojun, a vice-mayor of Shanghai. Both are under investigation by the anti-graft watchdog.

Guo controls four companies listed on the mainland and four listed offshore, including Hong Kong-listed Fosun International, the group’s investment arm.

Starting with pharmaceuticals in the 1990s, Guo has emerged as one of China’s most prolific international dealmakers, snapping up everything from insurance companies to travel firms. Among his recent acquisitions are holiday group Club Med, America’s Meadowbrook Insurance Group and Ironshore, and Portuguese insurer Caixa Seguros.

“We are still in shock, although there have been similar rumours about him in the past as well,” one Fosun source said. “Guo is very cautious in his handling of the government. As he often tells us, stay close to politics, but stay away from politicians.”

Guo and his company were officially linked to a corruption case in August. He was alleged to have sold property below market rates to Wang Zongnan, former head of state-owned Bright Food Group, who was sentenced to 18 years in jail for embezzlement and bribery. There was no ruling against Guo himself.

In 2013, Guo’s Shanghai Fosun Pharmaceutical saw 7 billion yuan (HK$8.4 billion) of market capitalisation evaporate in a day after rumours that the authorities had restricted his movements.