Detained Billionaire Developer Highlights Key Man Risk in China
- Future Land shares plunged 34% in two days, bonds also hit
- Wang’s detention could deliver a serious reputational blow
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It’s one of the least talked about dangers for investors in China, but it has the potential to be the most damaging: key man risk.
Shareholders of Future Land Development Holdings Ltd. learned that the hard way this week after Shanghai police detained Wang Zhenhua, the firm’s billionaire founder and controlling stakeholder. The news sparked a record two-day tumble in the stock, sent the company’s bonds plunging and fueled speculation it may have to sell assets to rivals. S&P Global Ratings placed Future Land on negative watch Friday to reflect the potential reputational damage.