Fosun CEO says Chairman Guo investigation mostly about his personal affairs

Caijing said Monday that Guo has “finalised” assisting in the inquiries and “returned home safely”.

Wang Qunbin, president of Fosun International, said the ongoing investigation more concerning Guo’s personal matters rather than Fosun’s business practices.

Fosun International employees were unable to contact Guo Guangchang after midday Thursday the magazine Caixin said on its website. Fosun later issued a clarification insisting Guo, widely known as China’s Warren Buffett, was cooperating with authorities on a probe and was not arrested. Companies owned by Fosun listed in Shanghai also suspended trading in their shares.

The confusion surrounding Guo’s whereabouts last week is the latest in a series of mysterious disappearances or arrests of senior executives at top Chinese companies, as authorities target the financial sector as part of an anti-graft campaign following a dramatic stock market rout earlier this year.

Shares in one of its core investments, Shanghai Fosun Pharmaceutical, also tumbled Monday, and other group stocks that had been under a trading stoppage Friday sold off as well.

Israel’s Delek Group said on Sunday that representatives of Fosun would arrive in the country in the coming days to discuss its agreed deal to buy a controlling stake in Israeli insurer Phoenix Holdings.

It later confirmed: “After making enquiries, the company understands that Mr Guo is now assisting in certain investigations carried out by Mainland judiciary authorities”.

In its Friday report, Caixin said messages on social media sites claimed Guo was seen being escorted by police at an airport in Shanghai, but the reason was unknown.

News of the investigation came as a unit of Fosun is in the process of negotiating a $700 million credit line, which the company needs to finance its day to day operations, bankers say.

Guo has a net worth of US$7.8 billion, according to the Hurun Report, which follows China’s wealthy.

Trading in the shares of Fosun International, the group’s main subsidiary, were halted on Friday “pending the release of an announcement containing inside information”, it said in a statement.

It is imperative to state that a court in Shanghai that Guo had inappropriate connections with the Chairman of a state-owned supermarket chain who was sentenced to 18 years in jail in August. In October, the company completed a USD1.5 billion rights offering, with some of the money tagged for mergers and acquisitions in banking and insurance.