July 17 (UPI) -- The Chinese government blocked banks from lending to entertainment conglomerate Dalian Wanda Group, sources close to the decision said.
The company, owned by billionaire Wang Jinanlin, began as a real estate company but has moved into international acquisitions that include U.S. theater chain AMC Entertainment Holdings Inc., Britain's Odeon & UCI Cinemas Group Ltd., and Hollywood film producer Legendary Entertainment.
A planned $1 billion deal to acquire Dick Clark Productions in 2016 fell through after concerns about capital outflows of Chinese capital.
The company is attempting to build a global entertainment company, but Chinese bank regulators advised major banks in June that six of Wanda's recent foreign acquisitions conflicted with government restrictions, the Wall Street Journal reported.
Banking regulators asked lenders to review loans made to five big companies engaged in overseas acquisitions, including Wanda, to determine if the assumed debt posed a credit risk.
The government measures include a ban on banks from providing Wanda with financial support, Bloomberg News said, citing sources familiar with the government action. It added that the constriction of funding is a setback for Wang, whose company announced $20 billion in acquisitions since 2016.
The government is increasing a crackdown on capital outflows in a politically sensitive year in China.
Wang is regarded as China's second-wealthiest person.