Shares in Suning Commerce Group Co Ltd tumbled by as much as 6% on Wednesday, after the Chinese retail giant was referenced in a state television program broadly focused on local firms making risky overseas acquisitions.
China Central Television (CCTV) mentioned Suning’s 2016 purchase of a 70% stake in Italian soccer club Inter Milan for 270 million euros (US$311.61 million) “as an example” of a deal that potentially raised concerns.
“This famous club has been loss-making for five years, with total losses of 275.9 million euros,” the CCTV narrator said during the 25-minute show aired on Tuesday night.
“What is the purpose of acquisitions like this?”
Beijing is on a drive to control risks in its financial system, including firms taking on excessive levels of debt to fund overseas deals. Chinese authorities clamped down on capital outflows and overseas acquisitions last year.
The curbs have drawn in other major Chinese firms including property developer Dalian Wanda Group, Anbang Insurance Group, Fosun International Ltd and HNA Group.
Chinese regulators have told banks to stop providing funding for several of Dalian Wanda’s overseas purchases, sources familiar with the matter said on Monday.
“This club has been loss-making for five years, with total losses of 275.9 million euros. What is the purpose of acquisitions like this?”
China’s biggest electronics retailer, Suning, which is making a big push into sports and media rights, has not yet been publicly targeted by regulators.
A Suning spokesman did not respond to requests for comment. However, another person at the company, who did not want to be named, said it was “purely coincidence” that CCTV was discussing the deal at this time.
Suning shares fell 6.5% to a near 7-week low of 10.22 yuan (US$1.51), before recovering slightly to trade at 10.65 yuan when Chinese markets closed.
Chinese authorities reiterated earlier on Tuesday that they would look to curb “irrational” overseas investments, a drive started last year which has zeroed in on deals in real estate, entertainment and sport.
The CCTV show involved an interview with a researcher at the state-backed Chinese Academy of Social Sciences. It also mentioned a separate Chinese deal for rival Italian soccer club AC Milan last year, and named the property developer Sunac.