China's Wanda Stock Crashes Amid Rumor of Chairman's Detainment
Wanda said the claim — first carried on a Chinese-language blog — was "false and malicious."
Chinese conglomerate Dalian Wanda Group forcefully denied rumors that its billionaire chairman Wang Jianlin was detained by authorities and forbidden to leave China. But the damage had already been done to shares in its Hong Kong-listed subsidiary, which plummeted some 10 percent Monday.
Wanda moved quickly to respond to the turmoil, saying the reports were false and malicious.
"Certain individuals with ulterior motives have recently created and spread various vicious rumors regarding the chairman of Wanda Group, Mr. Wang Jianlin," the company said in a statement.
The rumor, variations of which have been circulating online in China for months, was carried by a Taiwanese blog before being picked up by several more established Chinese tabloids. The blog claimed that Wang was stopped, with his family, while attempting to depart the Chinese city of Tianjian aboard a private jet bound for the U.K.
Because of the power and opacity with which the state lords over private industry in China, investors in prominent firms are always on edge over real or perceived signs of political disfavor. And Chinese business leaders have gone missing before. In December 2015, Chinese conglomerate Fosun lost contact with its billionaire chairman Guo Guangcheng, leading to speculation that he had been picked up on corruption charges. Guo later resurfaced with the explanation that he was "assisting" the Chinese authorities with a special investigation.
Wanda, along with Fosun, Anbang Insurance and HNA Group, has been at the center of an escalating government crackdown on corporate debt and capital outflows. Sources say Chinese banks have been instructed to stop lending to several of Wanda's overseas acquisitions in the entertainment, real estate and sports sectors.
Dalian Wanda Hotel Development, listed in Hong Kong, saw its shares fall as much as 11 percent Monday, while fellow subsidiary Dalian Wanda Commercial Properties saw the yield on its U.S. dollar bonds rise 27 basis points, according to The Financial Times. Share prices had mostly bounced back following Wanda's statement, however.
More of Wanda's statement: "Wanda Group strongly reiterates that all of these rumors are utterly baseless and have ulterior motives behind them. Wanda Group encourages the public not to believe the rumors or spread them further. We have reported the situation to relevant government department and also reported the case to public security authorities. Wanda Group is determined to protect its rights with legal actions and pursue legal actions against the relevant media."