(Bloomberg) — Landing International Development Ltd. shares suffered their biggest weekly plunge ever after the casino operator said Chairman Yang Zhihui was unreachable.
Company officials have been unable to reach Yang since Aug. 23, Landing said in a Hong Kong stock exchange filing Thursday. Caixin reported earlier that Yang is a target of investigators looking into ties with China Huarong Asset Management Co., a state-owned bad-debt manager whose former chairman, Lai Xiaomin, is under investigation for alleged corruption.
The news delivered another shock to investors just two weeks after the company’s $1.5 billion Philippine project was thrown into doubt. Landing dropped as much as 16 percent on Friday. The company has lost 42 percent of its value this week and now has a market capitalization of about $1.2 billion.
Since becoming China’s president in 2013, Xi Jinping has led an anti-corruption campaign that has nabbed more than 1.5 million Communist Party cadres.
More recently, the campaign has been reaching into corporate boardrooms as part of an effort to halt the debt-fueled expansion of China’s biggest businesses. High-profile executives at state-owned enterprises and private sector billionaires are finding their wealth and connections are no longer enough to shield them from probes into corruption and financial crimes.
A unit of Huarong International Financial Holdings lent HK$660 million ($84 million) to a holding company of Yang’s in December 2016, debt that was personally guaranteed by Yang, according to a Hong Kong exchange filing.
Questions now surround the tycoon at a particularly bad time for Landing. The company’s stock has been sinking since Philippine President Rodrigo Duterte unexpectedly ordered a review of Landing’s casino lease contract on Aug. 7, the day the company broke ground on the project. Duterte called the contract “flawed.”
Landing declined to comment, while a China Huarong representative didn’t reply to requests for comment.
Landing opened its only casino resort, Jeju Shinhwa World in Korea, earlier this year. Yang is the company’s largest shareholder with a 50.5 percent stake. Landing, his main holding, has plunged about 74 percent since he debuted on the Bloomberg Billionaires Index in April at $1.6 billion.
It’s not the first time a Chinese tycoon has gone missing after an aggressive expansion. Financier Xiao Jianhua, who led the Tomorrow Holding Co. empire, was taken away by Chinese authorities in early 2017, the South China Morning Post reported at the time. The newspaper subsequently cited mainland sources as saying that Xiao was helping with investigations into matters that included “bribery and stock market manipulation.”