Wanda shares suspended after rumours trigger drop
Shares in a film unit of Chinese conglomerate Dalian Wanda Group were suspended from trading in Shenzhen after a dramatic fall on Thursday following rumours that banks would dump the firm's bonds.
The group headed by one of China's richest men, Wang Jianlin, issued a statement rejecting online "speculations" as "just rumours".
"Today, someone on the internet viciously speculated that some banks, including China Construction Bank, issued a notice to dump Wanda's bonds," the statement said.
Wanda said an investigation concluded that the bank had never issued such a notice and that the company's operations were "fine".
But the rumours were enough to send the group's yuan- and dollar-denominated bonds plunging.
It also caused shares of Wanda Film Holding to drop close to its daily limit of 10 percent before trading was suspended.
The commercial property developer has diversified rapidly in recent years into entertainment and sports.
Respected business magazine Caixin reported that China's banking regulator had asked banks to go through the credit and risk analysis of Wanda and other domestic firms such as Fosun and HNA group due to their heavy investment overseas.
Caixin said the regulator's order was only meant to rule out any potential risks that might have been involved in their massive buying overseas.
The banks, however, were concerned and made "risk-evasive" moves themselves, the report said.
Wang is considered to be close to China's Communist leadership.
But Castor Pang, head of research at Core-Pacific Yamaichi HK, said there was speculation about political risks regarding the Wanda Group.
"The most important factor of doing business in China is the company's political stance. It is important for the company to 'stand at the right side'", Pang was quoted as saying by Bloomberg News.
Fosun's shares also plunged at the Hong Kong stock market on Thursday.
But a Fosun spokeswoman said "everything is normal" at the company.
Wanda bought AMC Entertainment Holdings -- owner of US-based cinema chain AMC Theatres -- for $2.6 billion in 2012 and last year acquired Legendary Entertainment for $3.5 billion.
But it had to abort a deal to buy the operator of the Golden Globe awards in a $1 billion deal following reports that it was sunk by a Chinese clampdown on overseas investments.
Fosun, which has interests in property, finance, pharmaceuticals, steel and entertainment, has been aggressively buying assets in Europe and North America.
In 2015 it took over the French holiday resorts group Club Med.
© 2017 AFP