China Renaissance stated its lacking founder Bao Fan was “co-operating in an investigation” with Chinese language authorities, greater than every week after the funding financial institution disclosed it had been unable to contact him.
In a terse inventory trade submitting late on Sunday in Hong Kong, the corporate stated its board had “develop into conscious that Mr Bao is presently co-operating in an investigation being carried out by sure authorities within the Folks’s Republic of China”.
The disappearance of Bao, a former Morgan Stanley and Credit score Suisse banker famed for wheeling and dealing on behalf of essentially the most highly effective company teams in China’s know-how sector, has solid a pall over the trade simply because it appeared set to attract a line below a protracted regulatory crackdown by Beijing.
Bao rose to prominence by means of China Renaissance, founding the boutique tech funding agency in 2005 to offer preliminary public providing and different capital markets companies to the nation’s rising tech stars.
The board of the funding financial institution stated its operations “are persevering with usually”. It added that the corporate “will duly co-operate and help with any lawful request from the related PRC authorities, if and when made”.
Hong Kong-listed shares in China Renaissance have fallen 29 per cent because it revealed on February 16 that it was unable to contact Bao, the face of the funding financial institution and its primary rainmaker because of his private relationships with a lot of China’s tech billionaires.
However the regular enterprise offered by these ties has dried up in recent times throughout a interval of intense regulatory scrutiny for the sector that started shortly after ride-hailing group Didi Chuxing’s botched New York itemizing, on which China Renaissance served as bookrunner.
Didi pushed forward with its $4.4bn share sale in 2021 regardless of nationwide safety issues from regulators, and the group was pressured to delist in June final 12 months.
Bao’s involvement in a authorities investigation additionally makes him the second govt at China Renaissance to be summoned by authorities in relation to an official probe.
In September, China’s securities regulator demanded that Cong Lin, the financial institution’s president and head of its securities unit, got here in for a “supervisory dialogue”. Cong exited key positions on the securities unit inside days and was detained by Chinese language authorities round that point.
Cong was employed by China Renaissance after taking part in a key position in a strategic partnership between the funding financial institution and ICBC Worldwide, a division of China’s state-run financial institution ICBC.
As a part of that partnership, introduced in 2017, ICBC Worldwide offered a $200mn credit score line to China Renaissance backed by pledged shares within the funding financial institution, with the stipulation that the funds be paid again quickly after its Hong Kong itemizing.