Wednesday, Fosun International stated that media reports claiming that Chinese regulators instructed the country’s largest banks to begin a series of inspections on their financial exposure to the Chinese giant were untrue.
Bloomberg reported on Tuesday, citing sources with knowledge of the situation, that authorities including the China Banking and Insurance Regulatory Commission (CBIRC) had recommended that commercial banks evaluate their exposure to Fosun’s debt and assess potential liquidity problems.
On Wednesday, shares of the company fell as much as 7.5% to HK$4.53, nearing a 10-year low.
Fosun stated in a statement that the rumors were “complete rubbish” and that it had sought confirmation from regulators via several channels. According to the corporation, the CBIRC has not queried banks about their financial exposure to Fosun and many banks that work with Fosun have not gotten such a notice.
Fosun’s Chief Financial Officer Gong Ping stated in a statement that the “complex external environment” has led to an “unbalanced interpretation” of the company’s recent asset sales and stake reductions.
“Fosun’s recent seemingly regular cutbacks and sales are a continuation of its financial strategy over the past few years, which has been to maintain a balance between investments and withdrawals,” he said.
CBIRC has not responded to a request for comment from Reuters.
Fosun owns resort brand Club Med and oversees French fashion label Lanvin among other holdings. Prior to Beijing’s crackdown on ostentatious overseas acquisitions a few years ago, it was one of China’s most acquisitive companies.
The company has agreed to sell its 4.89 percent investment in Tsingtao Brewery Co., Ltd. and is also lowering its holdings in Fosun Tourism.