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Wang Zhenhua: The billionaire real estate empire crashes after the police arrest him



Billionaire Wang Zhenhua, who founded Future Land Development Holdings in 1996, was arrested earlier this week for allegedly abusing a minor in a hotel in Shanghai.
Future Land, known in China under the name of its subsidiary Seazen Holdings, issued an open letter on Chinese Friday stating the behavior reported by the founder and his "great suffering" excused victims and their family.

"We are deeply disturbed, shocked and annoyed that it is the founder of our company who caused this storm," the company said. "We and the public believe that adolescents are the future of society, and any behavior that harms them should be punished by law."

Shanghai police announced Wednesday that they were serving a 57-year prison sentence. Old man, identified only with surname Wang, for alleged child abuse in a local hotel. The police continue to investigate, but do not want to comment on their statement.

"At 9:00 pm on July 3, the Shanghai police released a statement about their official Weibo account, which shows that the police have confirmed that Wang Zhenhua, the de facto controller of Seazen Holdings, on suspicion of "harassing a girl," reported a state-run Chinese news agency on Thursday, said CNN was unable to contact a Wang representative.

Future Land announced Wednesday in a filing with Wang dismissing as chairman After the authorities in Shanghai said that he had been detained for "personal" crimes, reasons for doing so. "
Its shares fell 36% on Wednesday, Thursday and Friday on the Hong Kong Stock Exchange, while S-Enjoy Service Group shares ̵
1; a property management company owned by Wang 73% – fell 41%. in the same period.

Seazen Holdings shares fell 10% each Thursday and Friday, reflecting the maximum daily movement allowed on the Shanghai Stock Exchange.

According to Refinitive, the crash reduced the combined value of the three companies by $ 5.4 billion.

Global rating agencies warned on Friday that Wang's detention could affect the real estate group's reputation with partners, investors and financial institutions and potential clients.

"From our point of view, the seriousness of the allegation and the sudden change of leadership could have serious repercussions on Future Land's reputation and brand name," S & P Global Ratings said.

Nomura and Goldman Sachs analysts lowered their futures price targets on Friday, pointing to risks associated with the chairman's move.

According to Xinmin Evening News, a local newspaper, on June 29, two girls were brought to Wang Zhenhua's hotel in Shanghai operated by the state-owned Shanghai United Media Group. The mother of one of them reported the alleged crime to the police, the newspaper reported.

Other Chinese media, including the state-run English-language daily China Daily and the leading economic paper Caixin, have since established the man, who was arrested by the police as a real estate magnate.

Future Land, Seazen and S-Enjoy have not responded to repeated requests for additional comments.

S-Enjoy admitted that Wang was detained on Wednesday in a filing case, but said it had nothing to do with the company's "normal" business.
The Seazen website has been updated to remove Wang from his management team lineup. His place as chairman was taken by his son Wang Xiaosong.
The impact of Wang's imprisonment, according to Bloomberg Billionaire's Index, has already resulted in a significant financial loss for his personal assets, which has shrunk by $ 1.5 billion over the last two days.

Wang now has a value of about $ 5 billion.

Lily Lee and Yong Xiong from Beijing contributed to this article.


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