Fosun International said on Friday its Chairman Guo Guangchang, one of China’s best-known entrepreneurs, is assisting authorities with an investigation, after an earlier report said the group lost contact with its billionaire founder.
Guo, the self-styled student of investor Warren Buffett, will still be able to take part in major company decisions through appropriate means, Fosun said, without elaborating.
“The directors of the company are of the view that this investigation has not posed any material adverse impact on the (finances) or operation of the group. The operations of the company remain normal,” Fosun International said.
Fosun International’s shares and convertible bonds, as well as shares in companies controlled by Guo, were suspended in Hong Kong and the mainland earlier on Friday.
Fosun International said its shares and convertible bonds will resume trade on Dec. 14.
The trading halt on Friday had come after a report by online publication Caixin stoked speculation among company watchers that Guo may have become the latest high-profile Chinese businessman to be quizzed by regulators as part of an anti-corruption crackdown.
Late on Thursday, Caixin quoted unidentified sources saying that Fosun had been unable to reach Guo since noon (0400 GMT) on Dec. 10. A Fosun spokesman in Hong Kong had declined comment on the report or Guo’s whereabouts.
China’s authorities have been aggressively clamping down on corruption in the financial sector.
Earlier in the year, a string of senior executives were found to have gone missing temporarily amid Beijing’s crackdown, in a sign of how serious China is about ramping up scrutiny of its financial sector.
CITIC Securities Co Ltd , China’s biggest brokerage, said on Dec. 6 it wasn’t able to contact two of its top executives following reports 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 at Moody’s Investors Service, said.
“But it is too early to say how this incident will impact Fosun’s operations.”
The question of Guo’s whereabouts had come to the attention of banking supervisors in Europe, where Fosun is in a battle to buy Anglo-German lender BHF Kleinwort Benson, people familiar with the regulatory process said.
Fosun had been given a green light by the European Central Bank (ECB) for its takeover effort, but with reservations, two of the people said.
Global Ambitions
Fosun in any case was facing a higher counterbid from French bank Oddo & Cie, which on Friday said the ECB had approved its approach to BHF on condition it raise 100 million euros ($110 million) in capital.
The ECB declined comment.
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 and has amassed a personal net worth of $5.7 billion, according to Forbes.
He underlined his global ambitions earlier this year, closing a billion-dollar takeover of the Club Med resort chain. In total Fosun has spent more than $30 billion on foreign acquisitions and at the end of June 2015 it had total assets worth $55 billion.
After the Caixin report was published, Fosun’s overseas depository receipts in New York fell 6.6 percent overnight in unusually heavy over-the-counter trading, according to Thomson Reuters data.
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.
Fosun and Guo were named in August 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 scrutiny from regulators would reverberate internationally.
“Should Guo, well-known abroad, be found to be at the center 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. ($1 = 6.4538 Chinese yuan renminbi) ($1 = 0.9119 euros) (Additional reporting by Donny Kwok, Saikat Chatterjee in HONG KONG, John Ruwitch in SHANGHAI, Shu Zhang and Matthew Miller in BEIJING, Jonathan Gould, Andreas Kroener and Frank Siebelt in FRANKFURT.