China Says Wanda's Cross-Border Entertainment Deals Violate Capital Controls

China Blocks Banks From Financing Dalian Wanda's Foreign Acquisitions (Report)

China Blocks Banks From Financing Dalian Wanda's Foreign Acquisitions (Report)

For the government, targeting one of the nation's top businessmen represents an escalation of its broader efforts to crack down on capital outflows.

Run by China's richest man, Wang Jianlin, Wanda is one of a handful of Chinese conglomerates that have expanded aggressively overseas over the past few years, into areas well beyond their original business - in this case, property.

The company, owned by billionaire Wang Jinanlin, began as a real estate company but has moved into worldwide acquisitions that include U.S.

The deals being scrutinized include a Wanda unit's purchase of Nordic Cinema Group Holding AB and Carmike Cinemas Inc, the people said, without identifying the remaining transactions.

The paper said on Monday that the country's banking regulators had met with executives of China's state-owned lenders on June 20 and had advised them that six of Wanda's foreign acquisitions, including the acquisition of Legendary Entertainment for $3.5 billion last year and 2012's buyout of AMC Entertainment, were "subject to government capital restrictions enacted last year". As the pair of cinema chains are being acquired by Wanda's AMC subsidiary in the U.S., they do not seem to fall under the jurisdiction of Chinese regulators.

The new measure apparently prevents Wanda from getting additional financing from Chinese banks for the four projects it has already bought, which could jeopardizing the group's ability to finance the two deals that have not yet closed.

The China Banking Regulatory Commission (CBRC) did not immediately respond to a request for comment.

Chinese financial regulators have ordered the country's biggest banks to stop making loans to billionaire Wang Jianlin's Dalian Wanda to finance foreign entertainment acquisitions, according to a document seen by The Wall Street Journal.

In its most recent annual report at the end of 2015, Dalian Wanda Commercial Properties reported total debt of RMB 222 billion.

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