Yahoo Finance Missing Banker Bao Fan Is Cooperating in China Probe, His Firm Says
(Bloomberg) -- China Renaissance Holdings Ltd. said Chairman Bao Fan is cooperating in an unspecified investigation by Chinese authorities, offering the first public information about the banker’s whereabouts since he disappeared just over a week ago.
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In a short stock exchange statement on Sunday, the firm suggested it hadn’t been in touch with Bao and didn’t know where he was.
“The board has become aware that Mr. Bao is currently cooperating in an investigation being carried out by certain authorities in the People’s Republic of China,” the firm said. Renaissance will “cooperate and assist with any lawful request” from the relevant Chinese authorities, if and when they are made, it said.
Bao’s abrupt disappearance has unnerved China’s business elite and fanned speculation the nation’s finance industry is set to face increased scrutiny. As chairman of China’s pre-eminent tech-focused investment bank, the veteran dealmaker has broad connections across various business sectors and has been a go-to financier for some of the country’s biggest companies.
Several Chinese state-owned lenders have been asking China Renaissance for more information as they assess the risks of loans and other business ties to the firm, people familiar with the matter told Bloomberg News last week.
“I would expect all related parties to take precaution and pause on projects linked to the company as it’s not immediately clear what the probe is about and which part of its business could be implicated,” said Shen Meng, a director at Beijing-based investment bank Chanson & Co. “If the probe somehow concerns some of the tech deals it helped fix up, then it’ll impede the tech firms’ overseas listing plans.”
In China, a suddenly absent boss has come to signal a crackdown or investigation by authorities. In many cases, the person is said to be assisting or cooperating graft probes. Publicly listed companies typically report they have lost contact with the executive and need to make their own inquiries into what happened within the country’s opaque legal system.
Around the same time Bao went missing, authorities also abruptly removed the Communist Party chief of the nation’s largest property insurer. That move came days after online criticism that Luo Xi, who remains chairman of the firm, was building a personality cult when the company demanded employees recite his “golden quotes.”
President Xi Jinping launched a broad anti-corruption probe in late 2021 targeting the nation’s $60 trillion financial sector, which has brought down dozens of officials. The probe has also implicated the investment banking community, ensnaring bankers from brokerages including Everbright Securities Co. and Guotai Junan Securities Co.
China Renaissance’s shares plunged 28% on Feb. 17, the day after the firm revealed it had lost contact with Bao. Its stock gained as much as 3.2% early Monday, but is still down 11% this year.
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