China Renaissance said its missing founder Bao Fan was “cooperating with an investigation” with Chinese authorities, more than a week after the investment bank revealed it had been unable to contact him.
In a stock exchange filing late Sunday in Hong Kong, the company said its board “had become aware that Mr Bao is currently cooperating with an investigation being conducted by certain authorities in the People’s Republic of China”.
The disappearance of Bao, a former Morgan Stanley and Credit Suisse banker renowned for wheeling and dealing on behalf of the most powerful corporate groups in China’s technology sector, has cast a shadow over the industry as it looks to draw a line under a long appeared ready. Regulatory action by Beijing.
Bao rose to prominence through the China renaissance, setting up a boutique tech investment firm in 2005 to provide initial public offerings and other capital markets services to the country’s rising tech stars.
The investment bank’s board said its operations were “continuing as normal”. It added that the company would “duly cooperate and assist with any valid requests from the relevant PRC authorities, if and when made”.
Hong Kong-listed shares in China Renaissance plunged 29 per cent after it was revealed on February 16 that it had been unable to contact Bao, the face of the investment bank and its main director, because of his personal ties to several of China’s tech billionaires. Was the rainmaker.
But the steady business provided by those ties has dried up in recent years during a period of intense regulatory scrutiny for the sector, which began shortly after the botched New York listing of Didi Chuxing, the ride-hailing group on which China Renaissance is based. served as bookrunner.
Didi pressed ahead with its $4.4bn share sale in 2021 despite national security concerns from regulators, and the group was forced to delist in June last year.
Bao’s involvement in a government investigation makes him the second official in China Renaissance to be summoned by the authorities in connection with an official investigation.
In September, China’s securities regulator demanded that the bank’s president and head of its securities unit, Kang Lin, appear for “supervisory discussions”. Within days, Kong exited key positions in the securities unit and was detained by Chinese authorities at the time.
Cong was hired by China Renaissance after playing a key role in the strategic partnership between the investment bank and ICBC International, a division of China’s state-owned bank ICBC.
As part of that partnership, announced in 2017, ICBC International provided a $200 million credit line to China Renaissance backed by pledged shares in the investment bank, with the condition that the money be repaid immediately following its Hong Kong listing.