New | Fosun chairman ‘assisting investigations’, trading to resume Monday
The chairman, dubbed China’s Warren Buffett, can attend to company decision making
The story in brief:
- Trading halt in seven Fosun companies in Hong Kong and China to be lifted Monday
- Fosun Chairman Guo Guangchang “assisting with investigations”
- Nasdaq listed Fosun shares sunk 11.4 per cent
- Fosun officials concerned that Guo’s absence could lead to instability in creditor relationships
- Guo, once dubbed China’s Warren Buffett, is one of the country’s richest men
Guo Guangchang, Fosun’s mysteriously absent billionaire chairman, has been “assisting investigations” since Thursday afternoon, but can attend the company’s decision making “in proper ways”, his company Shanghai Fosun Pharmaceutical (SFP) said in a filing to Shanghai Stock Exchange late Friday night.
Trading of the SFP will resume on Monday. The company announced trading suspension on Friday morning, together with another six companies under Guo’s conlomerate Fosun, including two Hong Kong listed firms.
The company has broken its silence more than 24 hours after rumours of his Guo’s arrest for questioning at Shanghai International Airport began swirling.
Two Fosun officials said earlier today Guo was allowed to make phone calls but his personal freedom is restricted, although it remains unknown whether he was detained on corruption charges or was assisting in probes into other people.
Five mainland China listed companies controlled by Fosun announced a trading suspension early Friday.
READ MORE: The making of tycoon Guo Guangchang
Two Hong Kong listed companies, Shanghai Fosun Pharmaceutical and Fosun International also announced trading suspensions in the morning a day after the disappearance of Guo.
The companies filed separate statements on the website of Hong Kong Exchanges & Clearing ahead of the market opening on Friday.
Fosun International Nasdaq-listed shares ended 11.4 per cent lower in Thursday’s session.
Liang said he was handling operations in Guo’s absence, according to comments he made in the micro-blogging site wechat on Thursday night.
Li Haifeng, general manager of the public relations department of Fosun Group, declined to comment.
Bankers applying pressure
One official at Fosun said bankers have been applying pressure upon the company for a clear explanation as soon as possible, said an official with Fosun.
“Fosun has very big capital flow in and out every single day,” the official said. “It would be problematic if he could not sign critical documents. It could be even more problematic if we do not know for what and for how long he will be away.”
Mainland business news website Caixin reported Thursday evening that the conglomerate could not contact Guo since noon and that it was still unknown whether he was detained on corruption charges or was assisting in probes into others. The report cited unidentified sources.
One theory circulated on social media is that Guo was taken away by police at the Shanghai airport while returning from Hong Kong.
Guo a micro-manager?
Guo, 48, is viewed as a very hands-on manager, prone even to micro managing small decisions relating to his sprawling business empire.
The group has already expanded to one of the country’s largest and most well-recognized privately-owned investment groups.
New York-listed companies partially held by Fosun suffered some selling pressure on Thursday. Internet portal operator Sina, in which Fosun holds a 8.75 per cent stake, fell 4.4 per cent.
Elsewhere on Nasdaq, Youku Tudou, in which Fosun owns 3.59 per cent stake, finished down 0.07 per cent, and Soufun, in which Fosun owns 3.1 per cent, finished down 3.36 per cent, while Bona Film, in which Fosun owns 20.34 per cents stake, dropped 3.54 per cent.
Dollar bonds of Fosun International fell by a record this morning. The US$400 million of 6.875 per cent 2020 securities slid 16.1 cents to 88.3 cents on the dollar as of 9:10 a.m. in Hong Kong, set for their biggest daily drop since its issuance in 2013, according to Bloomberg.
