Wanda's deal for Golden Globe firm collapses

Viola Davis , who won a Golden Globe for her role in the film Fences, with husband Julius Tennon

China's Dalian Wanda has pulled out of a $1bn bid for the owner of the Golden Globe TV and film awards, according to the US firm's parent company.

A clampdown by the Chinese government on overseas investments is thought to be to blame.

Eldridge Industries, the owner of Dick Clark Productions which runs the Golden Globes, said Wanda had failed to "honour its contractual obligations".

It added Dick Clark Production was suing Wanda for funds it was owned.

Dalian Wanda is run by China's richest man and property magnate Wang Jianlin. The company has yet to comment on the issue.

'Irrational investments'

The aborted deal was the latest in a number of entertainment acquisitions by the Chinese conglomerate, which already controls the AMC cinema chain, as well as Legendary Entertainment, co-producer of hit films including Godzilla and The Dark Knight Rises. The studio also has a tie-up with Sony Pictures.

The Dick Clark Productions deal would have marked the group's entry into television production.

However, analysts said capital controls meant Wanda had struggled to move money out of China.

Dalian Wanda is run by China's richest man and property magnate Wang Jianlin

Last year, the Chinese government put in place tougher restrictions to stop the outflow of money from the country.

It is concerned about the softening in the value of the yuan, a slowdown in growth and what it called "irrational investments".

The government wants companies to be more careful about the prices they are prepared to pay.

On Saturday, China's Commerce Minister Zhong Shan repeated the government's criticism of Chinese companies that were too quick to make overseas investments.

"We not only discourage these kinds of irrational investments, but we will also be keeping watch on them," he said.

Volte-face

Last year, Chinese firms went on a multi-billion dollar shopping spree, culminating in state-owned ChemChina making a $43bn bid for Swiss seed giant Syngenta.

Since then a $1bn financing deal between Paramount Pictures and two Chinese film companies Shanghai Film Group and Huahua Media has reportedly come to very little since it was announced in January.

Other deals have also reportedly run into trouble.

China's actions mark an about-turn in the authorities' attitude, since they previously urged companies to seek better returns and technological advances through overseas acquisitions.

But the slowdown in China's economic fortunes has made the government more cautious.

Last week, central bank governor Zhou Xiaochuan blamed the foreign investment wave on "overheated emotions".