On Thursday, June 22, 2017, the shares in two of the biggest conglomerates, HNA and Fosun International, declined by nearly 6%, amidst several rumors of orders to banks for assessing their exposure to offshore purchases. According to the reports, along with these two, the China’s banking regulator had also asked the lenders to investigate their loans exposure to Anbang Insurance, Zhejiang Luosen Ltd., and Dalian Wanda Group Co. as all these companies are major overseas investors.
HNA is the owner of Swissport and an airport services firm and Gate Gourmet, an airline caterer. It also holds the largest stake in Deutsche Bank and possesses a share of 25% in Hilton. Anbang holds the ownership of New York-based Waldorf Astoria hotel and Dalian Wanda owns the U.K.-based UCI chains and has a film division that is the biggest cinema operator in the world. Apart from these, Fosun procured Wolverhampton Wanderers football club in 2016 and Zhejiang Luosen bought AC Milan football club earlier this year.
Banking Regulator Focused on Controlling Money Outflow
In China, economies hold a bigger spot that politics. In the recent times, a lot of foreign assets have been purchased by Chinese money; however, the authorities want to curb the outflow of this money to foreign land. The banking regulator is also concerned regarding the funds that were used in all these purchases. The trading of short-term high-return wealth management products has held them particularly concerned.