Phoenix sale in doubt after arrest of Fosun chairman

Spokespersons for Fosun International, Gou’s privately-held conglomerate, confirmed on Friday that the company’s chairman is helping authorities with an investigation amidst a wide-ranging crackdown on corruption that has already affected the private sector.

Guo, the self-styled student of investor Warren Buffett, will still be able to take part in major company decisions through appropriate means, Fosun said, without elaborating. PHOE1;PHOE5) to China’s Fosun Group has been thrown into doubt following the arrest of the chairman Guo Guangchang by the Chinese authorities.

Fosun International’s shares and convertible bonds, as well as shares in companies controlled by Guo, were suspended in Hong Kong and the mainland earlier on Friday.

 After almost two years of takeover efforts, Fosun finally clinched control of the French holiday group Club Mediterranee in February.

After the Caixin report was published, Fosun’s overseas depository receipts in NY fell 6.6 percent overnight in unusually heavy over-the-counter trading, according to Thomson Reuters data.

Mr Guo’s reported disappearance marks the latest in a string of missing executives in China’s finance sector, which has become the focus of the Communist Party’s anti-corruption campaign.

Guo’s situation suggests authorities are extending scrutiny beyond state-owned enterprises, increasing uncertainty for investors, said Ronald Wan, CEO of investment banking at Partners Capital International in Hong Kong.

Wan said the government should clarify Guo’s status.

He denied earlier he was the target of a graft investigation. In October, the company completed a $1.5 billion rights offering, with some of the money tagged for mergers and acquisitions in banking and insurance.

 Today, the conglomerate has a wide range of worldwide investments including Greek fashion brand Folli Follie and the Chase Manhattan building in NY.

Guo, 48, has a net worth of $7.8 billion, according to the Hurun Report, which tracks China’s wealthiest people.

Mr Guo was linked to a corruption court case in August.

Both Wang and Ai are said to have links with Jiang.

In September, the police ministry announced Citic’s general manager, Cheng Boming, and other executives were suspected of insider trading and leaking sensitive information.

In the United States, it owns Meadowbrook Insurance Group and 20% of insurer Ironshore.

State news agency Xinhua said at the time Wang’s parents had bought two villas in Shanghai developed by Fosun at below-market prices, and that Wang had used his position to seek benefits for Fosun.