While Jack Ma is riding high, his chief competition for the title of China’s richest man appears to have fallen on some hard times.
On Thursday, Chinese billionaire Wang Jianlin’s Dalian Wanda Group saw shares and bonds in some of its units plunge sharply, causing rumors to spread that the well-connected company was having some political problems.
With an estimated net worth of $31.1 billion, Wang first made his fortune in the real estate sector in the 1990s. More recently, he has been buying up anything and everything that has to do with entertainment, including European movie screens, the production company behind the Golden Globes and even a Hollywood film studio. He’s also been busy building the world’s most expensive film studio in Qingdao and a “wolf pack” of domestic theme parks to take down Disney.
But Wang’s plans for world domination appear to have hit a slight bump in the road. According to Bloomberg, Wanda Film Holding Co. saw its shares plummet by as much as 10% on Thursday before they were suspended from trading in Shenzhen. Meanwhile in Hong Kong, Wanda Properties International Co.’s 2024 dropped by as much as 10.7 cents on the dollar, the biggest drop on record.
The sudden drop in stocks and bonds sparked rumors that Chinese banks had been ordered to sell off Wanda bonds. The company called these rumors “malicious speculation.”
However, Wanda’s denial has not stopped speculation that the company has run into political problems just as China’s banking regulator begins to conduct sweeping checks on some of the country’s top foreign deal-makers. Wang is a former PLA commander who has made his billions at the murky intersection of business and power at China’s highest levels.
“The most important factor of doing business in China is the company’s political stance, Castor Pang, head of research at Core-Pacific Yamaichi HK, told Bloomberg. “It is important for the company to ‘stand at the right side.’ Political risks are the factor that is most difficult to evaluate in China. Even it is just a rumor, investors will choose to sell off first.”
Last week, Chinese insurance giant Anbang, which has been buying up property around the globe, was forced to admit that its chairman was “unable to perform his duties” following reports that he had been taken away by authorities.
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