China’s top tech banker is missing, unsettling the financial industry
(Bloomberg) – The disappearance of high-profile banker Bao Fan has fueled speculation of a renewed crackdown on China’s financial industry.
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Bao’s Company China Renaissance Holdings Ltd. said Thursday it had lost contact with the banker, one of the country’s most prolific dealmakers in the past two decades. Shares in China Renaissance plunged as much as 50% in early trading in Hong Kong on Friday.
Bao has not been in contact with the company for about two days, said a person familiar with the matter, adding that the banker’s family have been told that he is helping with an investigation.
Former China Renaissance President Cong Lin has been involved in an investigation by authorities since September, the person said, asking not to be named as the matter is private.
While it’s not uncommon for Chinese executives to go unavailable when involved in a government investigation, Bao’s absence has the financial industry chilling. The outspoken financier has extensive connections across sectors and has been the first point of contact for some of China’s largest companies.
Read more: Missing bosses increase the risks of investing in China: QuickTake
The investment bank said its board is not aware of any information that suggests Bao’s unavailability could be related to the company’s business or operations, and it is running normally under the board. Bao holds a majority stake and is the company’s chairman and chief executive.
A spokesman for China Renaissance in New York declined to comment on Bao when reached by phone Thursday. The company did not immediately respond to an emailed request for comment on Cong Friday. Caixin first reported Bao’s absence.
“It could be a long-term overhang for the stock as Bao is the key man for the company,” said Willer Chen, senior analyst at Forsyth Barr Asia Ltd.
Chinese President Xi Jinping launched a broad anti-corruption probe in late 2021 targeting the country’s $60 trillion financial sector, bringing down dozens of officials. The investigation has also involved the investment banking community, ensnaring bankers at brokerage firms such as Everbright Securities Co. and Guotai Junan Securities Co.
Still, China has eased its stance on the private sector in recent months, praising Ant Group Co. for following the Communist Party’s lead and reintroducing Didi ride-hailing service to app stores. It has also issued a comprehensive measure to support the real estate sector.
A former banker at Morgan Stanley and Credit Suisse Group AG, Bao made a name for himself by brokering difficult mergers and acquisitions, including those that led to the formation of Didi Global Inc. and Meituan.
China Renaissance itself is also an active investor and, according to its website, backs many tech companies that have grown into giants, including NIO Inc. and WuXi AppTec Co.
The company was bookrunner for JD.com Inc.’s $2 billion IPO in 2014 and a top underwriter for the 2021 Hong Kong listing of Kuaishou Technology, the largest internet IPO since Uber’s debut Technologies Inc. in 2019.
Bao expanded the company’s business into wealth management and brokerage services. According to its latest interim report, China Renaissance managed around 48.6 billion yuan ($7.1 billion) at the end of June 2022.
Cong held various positions at Industrial & Commercial Bank of China Ltd. inside He left China Renaissance last year, said a person familiar with the matter.
–Assisted by Jacob Gu, Foster Wong and John Cheng.
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