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December 14, 2015

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Probe focuses on ‘personal affairs’ of Guo and not Fosun

Source: Agencies | December 14, 2015, Monday | Print Edition

GUO Guangchang, one of China’s best-known entrepreneurs, is helping police with an investigation that focuses mostly on his personal affairs, the president of Guo’s investment conglomerate Fosun International said yesterday.

Fosun had confirmed on Friday that Guo, 48, was assisting authorities with a probe, a day after local media said the group had lost contact with its billionaire founder.

“We trust Chairman Guo is a wise man and will actively cooperate and fulfill his duties to assist the investigation as soon as possible,” company President Wang Qunbin told a conference call.

“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.”

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.

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.”

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

Fosun International’s shares and convertible bonds, as well as shares in companies controlled by Guo, were suspended in Hong Kong and the Chinese mainland on Friday. Fosun International shares and convertible bonds are due to resume trade today.

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 on Friday.

Fosun had been given a green light by the European Central Bank for its takeover, but with reservations, two of the people said.

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