China's Fosun not under investigation over overseas deals, says CEO Wang Qunbin

Fosun International has not been investigated by the country's regulators over its overseas investments and deals said Chief Executive Officer Wang Qunbin.
Fosun International has not been investigated by the country's regulators over its overseas investments and deals said Chief Executive Officer Wang Qunbin.PHOTO: AFP

HONG KONG (BLOOMBERG) - Fosun International, one of China’s most acquisitive conglomerates, brushed off the impact of a crackdown on overseas dealmaking, telling reporters on Thursday (Aug 31) that it welcomed Beijing’s guidelines, as it posted a jump in first-half profits.

After several years of splashy deals overseas, China has tightened the screws on acquisitions abroad – and has leant on banks to cut back on the lending that first fuelled the spree.

In June this year, the regulators ordered a group of lenders to assess exposure to some of China’s more aggressive dealmakers, including HNA, the property-to-film conglomerate Dalian Wanda and Anbang Insurance Group.

Fosun, best known outside China for its acquisition of French resort chain Club Med and Britain’s Thomas Cook Group, dismissed concerns it was being investigated, telling reporters it was "normal practice" for Chinese regulators to conduct regular checks on Chinese companies’ overseas investments.

“We haven’t sensed or have been informed that we are being investigated by the regulators,” CEO Wang Qunbin said.

He added that tougher rules were good news for Fosun, saying: “Fosun always insists on genuine investments which are in line with the regulation.”

Fosun had on Wednesday reported that growth in its core businesses – including Fosun Pharma, Club Med and Yuyuan – had helped net profit for the six months climb 33.6 per cent to 5.86 billion yuan (S$1.2 billion), up from 4.39 billion yuan a year earlier. Revenue increased 11.6 per cent to 36.3 billion yuan.

The group also said it would spin off and separately list its Sisram Medical unit in Hong Kong.

Fosun has been the poster child for China’s decade-long outbound push, which saw Chinese bidders spend a record US$105 billion (S$143 billion) on assets ranging from movie studios to football clubs in 2016.

In March, Fosun’s chief executive and vice president stepped down in a surprise reshuffle that raised concerns over the group’s strategy.