23 October 2016
Fosun chairman Guo Guangchang has amassed a personal net worth of US$5.7 billion. Photo: Reuters
Fosun chairman Guo Guangchang has amassed a personal net worth of US$5.7 billion. Photo: Reuters

Police probe of Fosun chief ‘mostly about his personal affairs’

Fosun Group chairman Guo Guangchang is helping police with an investigation that mostly concerns his personal affairs, a company official said.

“We trust chairman Guo is a wise man and will actively cooperate and fulfill his duties to assist the investigation as soon as possible,” Reuters quoted Fosun International Ltd. (00656.HK) president Wang Qunbin as telling a conference call on Sunday.

“It is mostly about his personal affairs,” said Wang, when asked whether the probe was related to the company or Guo personally.

Wang said he could not provide more details as the investigation was “sensitive”

Fosun had confirmed on Friday that Guo, one of China’s richest men, was assisting authorities with a probe, a day after local media said the group had lost contact with its billionaire founder.

Chief executive Liang Xinjun said Guo was helping police in Shanghai and said that he was currently assisting with an investigation and not the subject of it.

He did not give further details about the nature of the probe.

Guo’s sudden absence, and the lack of detailed information that the company has given about his status, underlines the opaqueness of China’s legal system.

A string of senior executives at Chinese companies have temporarily gone missing this year amid a crackdown by Beijing on its financial sector.

CITIC Securities Co. Ltd., China’s biggest brokerage, said on Dec. 6 it was unable to contact two of its top executives following reports they had been asked by authorities to assist in an investigation.

Liang said Fosun was in communication with its lenders, investors and credit ratings agencies and said the company was “not in crisis”, and its financial situation was “very healthy”.

The CEO said Guo was able to take part in major decisions involving the company, but also said Fosun had the management structures and business strength to withstand Guo’s absence, saying it did not rely on “any one executive”.

Liang also highlighted the company’s deep pockets, with cash and cash equivalents, alongside liquid financial assets, in excess of 60 billion yuan (US$9.3 billion).

Fosun International’s shares and convertible bonds, as well as shares in companies controlled by Guo, were suspended in Hong Kong and the mainland on Friday.

Fosun International shares and convertible bonds were due to resume trade on Monday.

Liang said the company would consider buying back stock if the share price fluctuated. He said progress on the company’s current deals was “proceeding normally”.

The question of Guo’s whereabouts has already come to the attention of banking supervisors in Europe, where Fosun is in a battle to buy Anglo-German bank BHF Kleinwort Benson, people familiar with the regulatory process said.

Israel’s Delek Group said on Sunday that representatives of Fosun would arrive in the country in the coming days to discuss its agreed deal to buy a controlling stake in Israeli insurer Phoenix Holdings.

Guo, 48, 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, a largely ceremonial advisory body to China’s parliament, and has amassed a personal net worth of US$5.7 billion, according to Forbes.

Earlier this year, Fosun clinched a billion-dollar takeover of the Club Med resort chain.

In total, Fosun has spent more than US$30 billion on foreign acquisitions and at the end of June 2015 it had total assets worth US$55 billion.

Born 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 (US$15,495) in capital.

– Contact us at [email protected]


EJI Weekly Newsletter