CITIC chairman to step down, while the Hong Kong arm of another big brokerage has gone missing.
Shares in the Hong Kong arm of one of China’s largest brokerages plummeted 12% Monday after it said its chairman had gone missing.
Guotai Junan International Ltd said it hadn’t been able to contact Yim Fung, its chairman and chief executive, since Nov. 18, and had therefore appointed a temporary replacement.
The company didn’t give any reason for Fung’s absence, but the news added to market concerns about China’s crackdown on alleged market irregularities following a slump in mainland stocks this year. The general market collapse caused large losses for private Chinese investment and was a major embarrassment to policy-makers who had promoted investment in the stock market. Officials had hoped that broadening demand for stock would enable some highly-indebted parts of the corporate sector to strengthen their balance sheets by raising more equity.
Prominent figures to have been arrested since the summer include Xu Xiang, head of private equity house Shanghai Zexi Investment, Zhang Yun, vice-chairman of the world’s third-largest bank, Agricultural Bank of China, and Li Yifei, the local head of London-based fund managers Man Group Plc MNGPY-1.65%.
At the weekend, the unfolding scandal appeared to claim its biggest scalp yet, as China’s biggest brokerage, CITIC Securities, confirmed its chairman Wang Dongming would stand down. Officially, the move is due to age concerns, but the official news agency Xinhua reported that four senior executives had been found guilty of illegal trading after arrests were made in September. The Financial Timesreported on Sunday that Wang had been forced out because of the scandal.