China’s eleventh richest man Guo Guangchang detained by the police

Club Med and Thomas Cook owner is target of anti-corruption investigation

Chinese investment company Fosun chairman Guo Guangchang ( ERIC PIERMONT/AFP/Getty Images)

The billionaire boss of China’s most famous global investment firm has been taken into custody by state authorities, forcing the suspension of the group’s shares in Hong Kong and raising awkward questions about the business climate in the world’s second-largest economy.

Guo Guangchang, the founder and chairman of Fosun International, has not been seen or heard from since he flew into Shanghai airport on Thursday. Speculation is rife that the 48-year-old, who is often described as “China’s Warren Buffett” and has an estimated personal net worth of $7bn, has been swept up in the Beijing government’s anti-corruption purge. Earlier this year, Chinese media linked Mr Guo to a corrupt property deal.

News of his disappearance prompted Fosun, which has a market capitalisation of about $14bn, to suspend trading in its shares on the Hong Kong stock exchange yesterday. The company released a short statement saying that Mr Guo was “assisting the relevant judicial authorities with an investigation”.

Fosun came to public attention in the West when it snapped up the French holiday resorts operator Club Med. It also has a stake in the British travel agent Thomas Cook and Canada’s Cirque du Soleil entertainment group. As well as investing in tourism, Fosun’s assets span steel, mining, real estate and insurance, both within and outside China. It is currently bidding to buy two banks in Germany.

A succession of Chinese executives have gone missing recently, although Mr Guo is by far the most high-profile. Earlier this month, two executives at Citic Securities disappeared, and last month Guotai Securities told the Hong Kong market that it was “unable to reach” its chief executive. All are believed to have been detained by police in relation to alleged market manipulation after the Shanghai stock exchange crash in the summer.

“Lost contact” is now used as a euphemism in China for the ruling Communist party holding officials and others for questioning indefinitely and at undisclosed locations.Li Yifei, head of China operations for the London-listed hedge fund Man Group, vanished for a week in August. When she finally emerged, she said, to widespread incredulity, that she had not been taken into custody but merely went on holiday

Photos circulated on Chinese social media yesterday showed someone resembling Mr Guo being escorted away at Shanghai airport by four plain-clothed men.

Some analysts warned of the negative impact of such “disappearances” of business people on the willingness of Western countries to permit Chinese investement.

“Guo is one of the high-profile Chinese entrepreneurs,” said Sally Yim, of the rating agency Moody’s. “This incident will raise eyebrows among foreign regulators, as Fosun has been aggressively expanding its global insurance footprint.”

Mr Guo, tai-chi enthusiast, launched Fosun with thee university friends in 1992. It floated in Hong Kong in 2007. Fosun yesterday tried to soothe investors, saying: “This investigation has not posed any material adverse impact on the [finances] or operation of the group”. It added that trade in its securities should resume on Monday.