Tycoon now in Shanghai helping with investigation
Fosun International Chairman Guo Guangchang is currently in Shanghai helping authorities with their investigations but it will not affect the running of the company, Vice-Chairman Liang Xinjun told a conference call held on Sunday.
Guo may continue to take part in decision-making processes concerning the company's major issues, and the ongoing investigation has not had any impact on the finances or "normal" operation of the company, according to a Fosun filing with the Hong Kong Stock Exchange on Friday.
Guo, a high-profile billionaire known as "China's Warren Buffet," was reportedly detained by the police on Friday, causing rampant market speculation since then. Trading of shares in Fosun International was suspended at 9 a.m. on Friday and will resume at 9 am on Monday, the filing noted.
The filing was signed by Guo, as chairman of Fosun International.
Fosun, founded in 1992 in Shanghai, is a conglomerate operating in segments including healthcare, steel and property development. It has subsidiaries that are publicly listed in the Chinese mainland and also in Hong Kong.
The company invested more than 60 billion yuan ($9.29 billion) in the health sector in the first half of 2015, up about 40 percent year-on-year, according to the company's interim report released in September. It has also spent heavily in other areas including the Internet sector.
Market turbulence
While trading in Fosun shares was suspended, New York-listed companies partially held by Fosun came under pressure on Thursday (U.S. time), Hong Kong-based newspaper South China Morning Post reported Friday. For example, Internet portal operator Sina Corp, in which Fosun holds an 8.75 percent stake, fell 4.4 percent. And Youku Tudou Inc, in which Fosun owns a 3.59 percent stake, finished down 0.07 percent, the newspaper noted.
"I consider Guo's detention as a personal issue, which should not affect corporate strategies," He Zhicheng, a Beijing-based independent market analyst told the Global Times Sunday.
Fosun's net assets have grown considerably over the past 11 years, Liang said in a transcript of the conference call, domestic news portal yicai.com reported Sunday. "And I will not sell the company's shares that I currently hold," he said.
Guo, whose net worth is nearly $7 billion, ranked 11th on the Forbes' China Rich List 2015.
"The company is not wholly controlled by Guo himself. It's a giant conglomerate incorporating various decision-makers," said He, the analyst.
Regulation needed
More needs to be done to allow the nation's private sector to thrive, but private companies operating in sectors closely related to people's livelihoods should remain "within the range of effective control by the government," an analyst, who wished to remain anonymous, told the Global Times Sunday.
The stock market crash over the summer also showed the need for government regulation, as the behavior of one or more investors in firms should not be allowed to jeopardize the financial market and the national economy, the analyst said.
Since the stock market plummeted in June and July, the central government has taken various measures to restore stability, including launching investigations into some securities firms and probing high-profile investors such as Xu Xiang, a legendary private fund manager in China, who was arrested in November on charges of insider trading and price manipulation.
The analyst said the measures show that the government is determined to crack down on wrongdoings in the financial market in order to ensure stability in the overall economy.
