Guo Guangchang, chairman of China’s largest private investment conglomerate, Fosun International, was reportedly detained by police yesterday amid a deepening anti-graft campaign.
Fosun made headlines internationally in 2013 by purchasing Chase Manhattan Plaza in New York for $725 million, and has become one of China’s largest cross-border investors by pursuing real estate and insurance acquisitions in across Europe, North America and Australia.
For the past two years Guo and Fosun have been denying reports that the executive was being investigated regarding his ties to Wang Zongnan, the former head of several major state-run companies who was jailed for bribery and misuse of state funds in August this year.
Guo Said to Be Taken Away at Noon Thursday
Guo, who famously co-founded Fosun in 1992 with three of his university classmates, was seen being taken away by police at an airport in Shanghai yesterday, according to accounts on Chinese social media. Chinese business news site, Caixin, spoke with sources said to be familiar with the case who reported that the company had been unable to contact its chairman since noon on Thursday.
Should Guo be detained for any length of time, it would be a serious blow to operations at the tightly managed conglomerate, where the 48-year-old billionaire is said to keep a tight grip on decision-making, including personal guiding all acquisitions. Trading in shares of Fosun International was suspended this morning on the Hong Kong exchange.
In August of this year, Guo was found by a Shanghai court to have had improper business relationships with Wang Zongnan, the former chairman of state-run department store chain Shanghai Friendship Group, as well as the former head of Shanghai-based SOE Lianhua Supermarket Holdings and Shanghai Bailian Group.
Wang was sentenced to 18 years in prison in August for misappropriating RMB 195 million in funds from the SOEs he managed.
China Anti-Corruption Wave Spreads
While some companies have previously been seen as too big to be felled in China, in recent weeks the anti-graft campaign started by Xi Jinping has gone after increasingly high profile targets in the business world.
Just last week state-run Citic Securities reported that it had not been able to contact the heads of its domestics and foreign investment bank divisions after local media reported that the two had been detained by police to “assist in an investigation.
Then on Tuesday China’s anti-graft watchdog censured 137 bankers at the country’s largest bank, ICBC, for violations of party discipline.