Trading suspended on Fosun shares as boss reported “detained by authorities”

Trading on Fosun shares was suspended in China on Friday as the boss of the company that owns a huge slice of business in Portugal has for all intents and purposes “disappeared”.
According to publications both here and in China, Guo Guangchang is helping his country’s authorities with an investigation.

Whether he is the centre of that investigation or simply a ‘witness’ is not explained.

But financial website Caixin online – described as “close to the Chinese government” – subtitles its story on the affair with the word: “Corruption”, saying Guo has been missing since noon last Monday (December 10).

He is understood to have been last seen “being escorted by police at an airport in Shanghai”.

Since then, the 48-year-old’s phone has been reportedly “powered off”.

Caixin adds that “Guo has repeatedly refuted claims that he was subject to a graft investigation since late 2013.

“In August, however, a Shanghai court found Guo had inappropriate connections to Wang Zongnan”, a high-ranking official within the Chinese Communist Party sentenced to 18 years in jail for “misusing 195 million yuan (around €27.5 million) in corporate funds”, writes the website.

Wang was also found to have “taken advantage of the authority that came with his job to seek benefits for Fosun Group”, adds Caixin.

Why this is ‘news’ in Portugal is that Guo – purportedly China’s 11th richest man and self-styled as an Asian Warren Buffet – was in the running to take over Novo Banco until the so-called ‘auction’ orchestrated by the Bank of Portugal collapsed with no contender prepared to offer the reserve €4 billion price.

Guo’s company bought up Fidelidade insurance company from Caixa Geral de Depósitos last year, as well as Espírito Santo Saúde, following the BES banking collapse.

Earlier this year, Fosun sealed the deal to takeover Club Med, the huge hotel group that has outlets in 40 countries, including one on Maria Luísa beach, Albufeira, Algarve.

But as Diário de Notícias reports today, Chinese authorities have been “maintaining close scrutiny on the country’s financial sector” since last summer’s stock market crash that wiped 30% of shares after a year of boom increases.

DN adds that a little over two weeks ago, Haitong – the Chinese company that took over BES International – also saw share trading suspended on the Chinese and Hong Kong stock exchanges after it was revealed the company was “being investigated by regulators due to the suspicion of irregularities in contracts established with clients, and the practice of loans with the imposition of margins”.

This latest news pointing to sinister dealings in the so-called business world comes in a week when Euro MP Ana Gomes went public with allegations that Portugal is “at the centre of a network financing terrorism”.

And according to the BBC, this is not the first high-ranking Chinese CEO to go inexplicably missing in recent weeks.

“It seems like almost every week there’s news of a mysterious disappearance at a Chinese financial firm”, reports the news service Asia business correspondent Karishma Vaswani, adding “There’s possibly nothing more damaging for a firm than admitting your chief executive has gone missing”.

A spokesperson for Fosun has since told reporters that share trading is expected to return to normal on the Chinese Stock Exchange on Monday.

natasha.donn@algarveresident.com