Shares in Fosun, one of China’s largest private-sector conglomerates, plunged to a decade low on Wednesday following a media report that regulators were scrutinising its debts
Fosun International Limited, the conglomerate’s flagship company, slid as much as 9.6 percent in Hong Kong to HK$4.41 on Wednesday, its lowest level since November 2012.
The jittery investor response came after Bloomberg News on Tuesday cited sources as saying regulators, including China’s banking watchdog, have told large lenders and state-owned enterprises to closely examine their exposure to Fosun.
Fosun’s Chief Financial Officer Alex Gong rejected those reports 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.
Founded in 1992 during the heady days of China’s initial “reform and opening” period, Fosun started off in pharmaceuticals and real estate but has since built a sprawling business empire that includes tourism and finance.
A prolific buyer of global assets, Fosun owns French brand Club Med and has a controlling stake in the fashion house Lanvin.
It is also the exclusive distributor of the BioNTech coronavirus vaccine in Greater China.
Chinese companies have faced growing scrutiny over their debt exposure, especially those in the property sector.
Multiple construction giants, including Evergrande, have defaulted on debts and been forced into major restructuring.
Fosun faces as much as around $8 billion in bond repayments through 2023, Bloomberg reported.
Moody’s last month downgraded Fosun citing weak liquidity and a weakening portfolio amid asset sales.
