The Chinese conglomerate that owns Hollywood studio Legendary Entertainment yesterday denied a report by a U.S. website that its chairman was detained by Chinese authorities that prompted a plunge in the share price of a Hong Kong subsidiary. Wanda Group rejected as "malicious slander" the report by Bowen Press that Wang Jianlin was temporarily detained in the eastern city of Tianjin last week and barred from leaving China. The Chinese-language Bowen Press cited unidentified sources.
Investors are unusually sensitive to reports about the status of Chinese business leaders following the disappearance of a billionaire in Hong Kong, reports that others have been questioned by authorities and tighter government control over investments abroad. Shares in Wanda's hotel unit traded on the Hong Kong stock exchange fell 10 percent following the Bowen Press report but partially recovered Monday and were down 6.4 percent at midday. Wanda's parent company is privately held. Wang is one of China's richest businesspeople, with a fortune estimated by the Hurun Report, which tracks the country's wealthy, at $30 billion. Wanda is one of the most prominent of a group of Chinese companies that have expanded aggressively abroad in recent years, investing billions of dollars in acquiring hotels, insurance companies, manufacturers of autos and robots and other assets. Wanda bought Legendary last year.
It acquired AMC in 2012, becoming the world's biggest cinema operator, and added the smaller Carmike Cinemas chain last year. That buying spree cooled last year after Chinese regulators tightened controls over outbound investment. The central bank governor said in March that Beijing needed to rein in excessive spending on foreign entertainment and sports assets that he said did little to develop China's economy. Wanda agreed in November to pay $1 billion for Dick Clark Productions, which produces the Golden Globes and the "Miss America" pageant. The seller, Eldridge Industries, called off the deal in March, saying Wanda failed to complete the purchase. Financial markets were rattled in February by reports another billionaire, Xiao Jianhua, was taken from his Hong Kong hotel by mainland police, though authorities have yet to confirm that. Executives of other companies also have been detained or questioned.