HONG KONG, (Reuters) – The disappearance of a star Chinese dealmaker has left his bank struggling to reassure clients and staff, people with knowledge of the matter said yesterday, and has heightened concerns about “key man risk” for investors.
Shares of China Renaissance Holdings 1911.HK fell by as much as 5% on Monday, following a record low in the previous session after the investment bank said it could not contact its founder, chairman and CEO Bao Fan.
The stock ended the day up 0.1% in the Hong Kong market that rose 0.8%.
Though the reasons for Bao’s disappearance are unclear, his case follows a series of incidents in which high-profile executives in China have gone missing with little explanation during a sweeping anti-corruption campaign spearheaded by President Xi Jinping.
Some of them reappeared as abruptly as they disappeared.
China Renaissance said on Thursday in a stock exchange filing that it had no information that Bao’s “unavailability” was related to its business, and that its operations were continuing normally.
China Renaissance co-founder Kevin Xie and its investment banking head, Wang Lixing, who are running the company in Bao’s absence, have asked staff not to believe or spread rumours, according to two sources and copies of their messages to staff seen by Reuters.
“At such a critical moment, everyone should trust the company. Don’t fret and stumble. It’s OK to encounter some difficulties in the short term,” Wang said in his message posted on the company’s Wechat group on Friday.
According to two sources and some media reports, authorities took Bao away earlier this month to assist in an investigation into a former colleague, Cong Lin, the company’s former president.
