Chinese dealmaker Bao Fan, founder of investment bank China Renaissance Holdings Ltd, has gone missing in the latest disappearance of a top business executive, unnerving investors and sending its stock down as much as 50 percent 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 Chinese leader 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 Chairman Guo Guangchang, who Fosun later said was assisting with investigations regarding a personal matter.
The Chinese Communist Party (CCP) in 2021 turned its sights on the country’s vast financial sector, kicking off a new round of a years-long regulatory crackdown.
The disappearance of Bao, also the company’s controlling shareholder, chairman and CEO, drove China Renaissance’s Hong Kong-listed stock to a record low of HK$5 in early trade, wiping off HK$2.8 billion ($360 million) in market value.
The stock regained some ground later in the day to end down 28 percent in a Hong Kong market that fell 1.3 percent. 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.
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.
Deals Adviser
A China Renaissance spokesperson referred Reuters request for comment on Friday to the investment bank’s public filing.China Renaissance is currently ranked ninth on China’s equity capital markets league table for 2023, according to Refinitiv, after it advised on Jiangsu Sanfame Polyester Material’s $363 million convertible bond last month.
The firm earned $20.6 million in Chinese related investment banking fees in 2022, down from $43.13 million a year earlier, the data showed.
Bao started China Renaissance in 2005 as a two-person team, seeking to match capital-hungry startups 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 $346 million.
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.
China Renaissance is also an active investor in the tech sector. In 2019, it raised more than 6.5 billion yuan ($950 million) in a yuan-denominated fund.
Bao’s disappearance comes days after property developer Seazen Group Ltd said it was unable to contact or reach its vice-chairman.
($1 = 7.8483 Hong Kong dollars)
