Chinese dealmaker Bao Fan, founder of investment bank China Renaissance Holdings, has gone missing in the latest disappearance of a top business executive, unnerving investors and sending its stock down as much as 50% on Friday.
The mainland China-based boutique bank said in an exchange filing late on Thursday the company had been unable to contact Bao.
China Renaissance’s board was not aware of any information that indicated Bao’s “unavailability is or might be related to the business and/or operations” of the group, which, it said, was continuing normally.
The dealmaker’s disappearance is the latest in a series of cases of high-profile Chinese executives going missing with little explanation during a sweeping anti-corruption campaign spearheaded by President Xi Jinping, though the reasons for Bao’s disappearance are unclear.
In 2015 alone, at least five executives became unreachable without prior notice to their companies, including Fosun Group chair Guo Guangchang, who Fosun later said was helping with investigations regarding a personal matter.
China’s ruling Communist Party in 2021 turned its sights on the country’s vast financial sector, kicking off a new round of a years-long campaign to uncover corruption and illegal dealings.
The disappearance, coming after China’s post-pandemic border reopening, has renewed focus on boosting the sagging economy has brightened the outlook for deals, as has an easing of a regulatory crackdown on technology firms.
The disappearance of Bao, also the company’s controlling shareholder, chair and CEO, drove China Renaissance's Hong Kong-listed stock to a record low of HK$5 in early trade, wiping off HK$2.8bn (about R6.5bn) in market value.
The stock regained some ground later in the day to end down 28% in a Hong Kong market that fell 1.3%. Nearly 30-million shares of the boutique investment bank changed hands on Friday, the highest on record.
Bao, who previously worked at Credit Suisse Group AG and Morgan Stanley, has been hailed as one of China’s best-connected bankers.
He was involved with major technology mergers including the tie-up of ride-hailing firms Didi and Kuaidi, food delivery giants Meituan and Dianping, and travel devices platforms Ctrip and Qunar.
“If a listed company voluntarily discloses that a senior manager or a major shareholder cannot be contacted, it’s truly unusual, as the person might have been out of reach for some time,” said Dickie Wong, executive director of research at Kingston Securities.
Famed Chinese ‘rainmaker’ banker goes missing in latest executive disappearance
The dealmaker’s disappearance is the latest in a series of cases of high-profile Chinese executives going missing with little explanation
Image: Bloomberg
Chinese dealmaker Bao Fan, founder of investment bank China Renaissance Holdings, has gone missing in the latest disappearance of a top business executive, unnerving investors and sending its stock down as much as 50% on Friday.
The mainland China-based boutique bank said in an exchange filing late on Thursday the company had been unable to contact Bao.
China Renaissance’s board was not aware of any information that indicated Bao’s “unavailability is or might be related to the business and/or operations” of the group, which, it said, was continuing normally.
The dealmaker’s disappearance is the latest in a series of cases of high-profile Chinese executives going missing with little explanation during a sweeping anti-corruption campaign spearheaded by President Xi Jinping, though the reasons for Bao’s disappearance are unclear.
In 2015 alone, at least five executives became unreachable without prior notice to their companies, including Fosun Group chair Guo Guangchang, who Fosun later said was helping with investigations regarding a personal matter.
China’s ruling Communist Party in 2021 turned its sights on the country’s vast financial sector, kicking off a new round of a years-long campaign to uncover corruption and illegal dealings.
The disappearance, coming after China’s post-pandemic border reopening, has renewed focus on boosting the sagging economy has brightened the outlook for deals, as has an easing of a regulatory crackdown on technology firms.
The disappearance of Bao, also the company’s controlling shareholder, chair and CEO, drove China Renaissance's Hong Kong-listed stock to a record low of HK$5 in early trade, wiping off HK$2.8bn (about R6.5bn) in market value.
The stock regained some ground later in the day to end down 28% in a Hong Kong market that fell 1.3%. Nearly 30-million shares of the boutique investment bank changed hands on Friday, the highest on record.
Bao, who previously worked at Credit Suisse Group AG and Morgan Stanley, has been hailed as one of China’s best-connected bankers.
He was involved with major technology mergers including the tie-up of ride-hailing firms Didi and Kuaidi, food delivery giants Meituan and Dianping, and travel devices platforms Ctrip and Qunar.
“If a listed company voluntarily discloses that a senior manager or a major shareholder cannot be contacted, it’s truly unusual, as the person might have been out of reach for some time,” said Dickie Wong, executive director of research at Kingston Securities.
China to craft policies to help economy, improve child care
Investors’ worst nightmare is that a company’s ability to continue operation is impaired, so a stock sell-off is not surprising given the uncertainty, Wong added.
Asked during a daily news conference on Friday whether the banker had been detained, Chinese foreign ministry spokesperson Wang Wenbin said he was not aware of the situation.
Deals adviser
At the helm of China Renaissance, Bao has taken an increasingly active role in the group’s private equity business in recent years, according to two sources with direct knowledge of the matter.
The sources declined to named due to sensitivity of the matter.
A China Renaissance spokesperson referred Reuters request for comment to the investment bank’s public filing.
China Renaissance is ranked ninth on China’s equity capital markets league table for 2023, according to Refinitiv, after it advised on Jiangsu Sanfame Polyester Material’s $363m convertible bond last month.
The firm earned $20.6m in Chinese-related investment banking fees in 2022, down from $43.13m a year earlier, the data showed.
Bao started China Renaissance in 2005 as a two-person team, seeking to match capital-hungry start-ups with venture capitalist and private equity investors. Since then, it expanded into services including underwriting, sales and trading.
The investment bank made its market debut in Hong Kong in 2018 after raising $346m.
China Renaissance has acted as adviser for some of China’s biggest tech initial public offerings (IPOs), including those of JD.Com Inc and Kuaishou Technology as well as Didi's New York listing in 2021.
Didi ran afoul of Chinese regulators when in 2021 it pressed ahead with the US stock listing against the regulator's will, sources previously said.
China Renaissance is also an active investor in the tech sector. In 2019, it raised more than 6.5 billion yuan (about R17.1bn) in a yuan-denominated fund.
Bao’s disappearance comes days after property developer Seazen Group said it was unable to contact or reach its vice-chair.
— Reuters
READ MORE
To relieve SA’s energy crisis, cut red tape and let other companies invest — NDB vice-president
US completes recovery of Chinese balloon, other 'object' searches called off
In China, Tesla could win the EV price battle — but lose the war
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most read
Latest Videos