Crackdown

22 June 2017 By Quentin Webb

The banking regulator is probing loans made to serial acquirers Anbang, Fosun, HNA and Wanda, reports say. Following the detention of Anbang’s chairman, the message is clear: bold foreign M&A is out of bounds. The puzzle is why the authorities let the splurge last for so long.

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China's banking regulator has ordered a group of commercial banks to assess their exposure to offshore purchases by a handful of acquisitive Chinese corporate groups, two people familiar with the matter told Reuters on June 22.

The companies include HNA Group, Dalian Wanda Group Co., Anbang Insurance Group, Fosun International and Zhejiang Luosen, the firm behind the purchase of A.C. Milan football club earlier this year, one of the sources said. Chinese financial journal Caixin reported the investigation earlier on June 22.

The China Banking Regulatory Commission made the request to gain better control of potential systemic risk as domestic companies move to acquire more assets in global markets, Reuters said.

The Wall Street Journal quoted one person with knowledge of the matter as saying the probe was meant to "examine those companies' leverage situations and risks".

Shares in Fosun International, Wanda Film Holding and Hong Kong-listed HNA Holding Group fell steeply.

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