China Renaissance Holdings stock crashes by 50% after founder went missing
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A well-known Chinese businessman and dealmaker, Bao Fan, who founded the investment bank China Renaissance Holdings, recently went missing. The mainland China-based bank reported that the company has been unable to get into contact with him or find any information regarding his whereabouts, which unnerved the firm’s investors. Following the revelation of his disappearance, the company’s stock sank by 50% in a single day.
The CEO of China Renaissance Holdings goes missing
China Renaissance bank reported the disappearance of its founder late on Thursday, saying that it was unable to contact him. This was onle the latest disappearance of a top business executive in the country, and the company’s board stated that it was not aware of any information that would explain Bao’s unavailability.
Nothing indicates that his unavailability might be related to the business and/or operations of the group. With that being the case, the bank intends to continue conducting business as usual.
A number of other Chinese executives have disappeared recently under similar circumstances — all high-profile executives, dealmakers, and businessmen. There is never any information about where they might be. One thing that is in common is that they all disappeared during an anti-corruption campaign that has swept the country, led by the nation’s President, Xi Jinping, himself.
Something similar happened in 2015, when a minimum of five executives suddenly became unreachable, without notifying their companies. This included Fosun Group Chairman, Guo Guangchang. Later, the group stated that he was assisting with an investigation involving personal matters.
China’s Communist Party started paying close attention to its financial sector two years ago, in 2021. At the time, it kickstarted an anti-corruption campaign, seeking to uncover any illegal dealings and put a stop to them.
Company’s stock crashes after the bank revealed the disappearance
The disappearance — one of many, as mentioned — came soon after the country reopened its borders and reduced its COVID-19 measures. In addition, China renewed its focus on improving the struggling economy, which brought a much brighter outlook for countless deals, and so did the easing of a regulatory crackdown on tech companies.
However, Bao’s disappearance has unnerved investors, as he acted as his company’s chairman, CEO, and controlling shareholder. The firm’s stocks, listed on Hong Kong Stock Exchange, immediately crashed, hitting a record low of HK$5 in early trade. Along the way, the move wiped off around $360 million (HK$2.8 billion) in market value.
After the news had time to settle in, the stock started to recover slightly, but it still ended the day down 28%. The Hong Kong market also saw 30 million shares exchange hands, which is the highest amount on record.
As for Bao himself, he used to work at Morgan Stanles, as well as Credit Suisse Group AG. many considered him to be one of the country’s best-connected bankers, involved with major tech mergings. The fact that the bank voluntarily disclosed his disappearance makes matter truly unusual, as noted by the Kingston Securities executive director of research, Dickie Wong.
