One of China’s richest real developers has lost $2 billion of his fortune in the past two days following word of his detention in Shanghai.
Wang Zhenhua was removed as chairman of Future Land Development Holdings after he was held by a district public security bureau “in criminal custody for personal reasons,” according to a statement on Wednesday by Future Land Development Holdings.
The company “is of the view that the criminal custody of Mr. Wang is not related to the operations of the Group, which remain normal,” Future Land said.
Investors appeared to disagree. Future Land’s Hong Kong-traded shares plunged for a second day today, losing 10.6% of their value. They closed at HK$7.19 compared with HK$10.56 on July 2 before news of Wang’s detention. Wang holds 71% of Future Land, whose shares have declined by a total of 32% in the past two days. Future Land was the most actively traded stock at the Hong Kong Stock Exchange today.
Shares in S-Enjoy Service, a Hong Kong-listed property management company that is 73% owned by Wang, fell by 13% today, and have lost more than a third of their value in the past two days. The combined two-day losses in Future Land and S-Enjoy have wiped out $2 billion of Wang’s fortune. Forbes now estimates he is worth approximately $4.4 billion.
Wang Xiaosong, the 31-year-old son of Wang Zhenhua, was appointed by Future Land’s board of directors as chairman yesterday, the company said.
A social media account published by the Shanghai Putuo district public security bureau said an individual surnamed Wang was among two people being held in criminal custody in a suspected case involving indecent behavior with a child. It didn’t provide the individual’s full name.
Wang Zhenhua entered the real estate industry in 1993.
China is home to the world’s second-largest number of billionaires after the United States.
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