Fosun’s founder Guo Guangchang quashes rumour he’s missing, says business is steady and robust
The founder and chairman of the Chinese owner of Club Med said he’d been on a business trip to Xi’an when rumours started circulating that he’d gone missing.
Guo Guangchang, founder and chairman of the Chinese conglomerate that owns the Club Med resorts chain, said he’s working with law enforcement to find out who’s spreading rumours about him, insisting that business at one of China’s largest asset acquirers is steady and robust.
“I’ve just returned from a business trip to Xi’an to deliver a speech on behalf of Shanghai and Zhejiang businesspeople, and I’ve just caught up on the news,” Guo said in an interview at Fosun’s Shanghai head office with the South China Morning Post. “Our ongoing operations are steady and robust. We thank our investors and everyone for your concerns. We’ve had a good 2016, and we expect to have an even better 2017.”
Guo’s comments are his first response since the share price of the company’s flagship drugmaker Shanghai Fosun Pharmaceutical Group fell as much as 8.8 per cent on the city’s bourse, dropping as much as 7.1 per cent in Hong Kong. The shares recovered on both exchanges after Fosun issued two statements, describing the talk of Guo missing as “pure rumour and vicious slander.”
Analysts said concerns over Guo’s whereabouts, though unfounded, raised concerns about the company’s longer term growth outlook. He’d also been reported to be unreachable in December 2015, when Fosun executives had explained that he was helping China’s judicial authorities with an unspecified investigation.
“It looks like that the company is always entangled with rumours and speculation,” said Wang Zheng, chief investment officer at Jingxi Investment Management in Shanghai. “That will raise concerns among investors whether the company is able to become bigger.’’
Guo was quick to set the record straight when asked by UBS analyst Angus Cheng on a telephone conference with investors, led by the investment bank. The call was live streamed on the internet and was simultaneously watched by more than 1,000 people.
“You’re all professionals, so you can read our balance sheet,” Guo said on the call. “Standard & Poor’s just raised our credit rating, which shows that we are constantly making improvements. Our debt level has gone down, while our funding sources have improved both locally and overseas. We are very steady when you compare us with other private enterprises in China.”
Founded in 1992, Fosun has exploded from a regional insurer into one of China’s biggest overseas acquirers of assets, with purchases from the Club Med to the Cirque de Soleil to banks in Portugal and a football club in the British Midlands.
There’s method in Fosun’s purchases, as the conglomerate organises its businesses to serve its mission to pursue health, happiness and wealth as an “ecosystem of synergistic units”, Guo said. Fosun will combine its health insurance with health management in a new solution for customers, he said.
“It’s not good for either the insurer or the customers if they are insured at the moment of sickness,” he said. “Fosun’s health insurance and health management will help protect its customers from illnesses.”
The businesses will operate under the Fosun United Health Insurance, which received approval last year from the China Insurance Regulatory Commission.