Stocks linked to China's Anbang International are tumbling after a respected magazine published a detailed report examining the company's murky structure.
A handful of real estate developers fell in Tuesday's morning session — Gemdale tumbled 3.8 percent, Financial Street Holdings dropped 3.5 percent, China Vanke lost 1.8 percent. Pharmaceutical company Dong-E-E-Jiao was down 3 percent and retailer Chang Chun Eurasia fell 1.6 percent during that period. China Railway, however, bucked the trend with a 1 percent rise.
Anbang is a private firm, but its various arms are among the top 10 shareholders of a number of companies, owning anywhere from 3 percent to 15 percent, according to Reuters data.
Anbang and its chairman, Wu Xiaohui, are fending off allegations made by a prominent weekly Chinese magazine looking at the firm's labyrinthine funding and how its assets grew to a whopping $275 billion. The report by Caixin was published online over the weekend, and alleged that a lack of transparency allowed the firm to obscure transactions between Anbang and its shareholders, hinting that these parties were in cahoots to move money around.
Caixin noted odd coincidences — for instance, many Anbang investors registering their businesses in the same city on the same day, and highlighted examples of shared addresses and contact information between shareholders. It also questioned how Anbang was able to make its multi-billion dollar acquisitions, saying the firm didn't appear to have enough in the bank.
Anbang has threatened to sue Caixin and its editor-in-chief, Hu Shuli, accusing the magazine of "slander" and saying its reports were "false." The company suggested Caixin was retaliating against Anbang because the magazine failed to secure advertising and sponsorship dollars from the insurance company.