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Fosun International shares fall as Guo said to assist probe
[SHANGHAI] Fosun International shares, which were suspended on Friday after a report that Chairman Guo Guangchang had gone missing, plunged by the most in five months after resuming trading on Monday.
The shares fell 10 per cent to HK$11.98 at 9:51 am in Hong Kong, after plunging as much as 13.5 per cent earlier, the biggest intraday decline since July 8. Chinese billionaire Guo is back at work after aiding authorities with an investigation and is attending an internal conference on Monday, according to people familiar with the matter.
Mr Guo, 48, who describes himself as a student of Warren Buffett, has built a global empire spanning everything from insurance and holiday resorts to entertainment through dozens of deals over the past three years. Reports that Guo couldn't be reached reverberated through markets, causing several companies linked to his conglomerate to halt their shares from trading on Friday.
Shares of Shanghai Fosun Pharmaceutical Group, which were also halted on Friday, fell 13 per cent in Hong Kong trading to HK$21.65.
Guo was assisting with an investigation into former Shanghai vice mayor Ai Baojun, people familiar with the situation said Friday. Caijing magazine earlier on Monday reported that Guo had returned home.
On a conference call Sunday, Fosun International President Wang Qunbin said he remains confident of the company's cash flow and future, and said that the probe is most likely related to "personal matters." Mr Guo's conglomerate spent US$5.7 billion over two years acquiring insurance assets, according to data compiled by Bloomberg. The insurance businesses, such as Portugal's Cia de Seguros Fidelidade Mundial SA and Bermuda-based Ironshore Inc., provide low-cost funding for acquisitions in other industries.
Fosun International has US$2 billion of acquisitions announced this year that haven't been completed. The company is competing for Anglo-German banking group BHF Kleinwort Benson Group and agreed to acquire Israeli insurer Phoenix Holdings in June. The company is competing for Anglo-German banking group BHF Kleinwort Benson Group and agreed to acquire Israeli insurer Phoenix Holdings in June.