Hong Kong, Sept 14 (AFP/APP): Club Med owner Fosun, one of China’s largest private-sector conglomerates, saw billions wiped off its value on Wednesday as jittery investors reacted to a media report that the group was under regulatory scrutiny.
There has been growing concern about the debts of Chinese companies, particularly after a run of high-profile defaults in the property sector last year that rippled through the wider economy.
Bloomberg News on Tuesday cited unnamed sources as saying that regulators, including China’s banking watchdog and the local commission overseeing state investments, have told large lenders and state-owned enterprises to closely examine their exposure to Fosun.
Shares in Fosun International Limited, the conglomerate’s flagship company, slid as much as 9.6 percent in Hong Kong on Wednesday.
They later pared some of those losses, ending the day down 6.6 percent at HK$4.56, the lowest level since late 2012.
Fosun’s Chief Financial Officer Alex Gong rejected the Bloomberg report as “completely false”.
“Neither the China Banking and Insurance Regulatory Commission (CBIRC) nor the Shanghai Banking and Insurance Regulatory Commission have asked commercial banks to find out about Fosun’s financial exposure, and those institutions have not received any notice of this,” Gong told the South China Morning Post.
The public had a “one-sided interpretation” of Fosun’s recent reductions in shareholdings and divestment and failed to see that they were part of a long-term financial strategy, the Shanghai-based company added in a statement.
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