- Personnel changes may signal tighter Citic Group oversight
- Chairman Wang to step aside; Citic Group's Zhang to join
Citic Securities Co., China’s biggest brokerage, will face tighter control from its state-owned parent after some of its top executives were targeted in government probes, according to people familiar with the matter.
The planned retirement of Chairman Wang Dongming, 64 -- who hasn’t been implicated in the government investigations -- and the pending addition of Citic Group Corp.’s Zhang Youjun, 50, to the brokerage’s board are part of the shake-up, according to the people, who asked not to be named because the plans aren’t public. A Citic Group-driven restructuring of the company is possible, the people said.
The Wang and Zhang changes were announced by Citic Securities in a stock exchange statement on Tuesday. A Citic Securities press officer in Hong Kong said a pending board election would mark a “new chapter” for the company, while declining to comment on any tightening of Citic Group’s control or prospects for restructuring.
Wang is retiring because of his age and will continue as chairman until the next board election, Citic said in its statement.
Citic Group’s Chairman Chang Zhenming has been appointed as Citic Securities’s party secretary, the top Communist Party official in the company, the people said. Zhang was named deputy party secretary, which signals that he is likely to succeed Wang as chairman, the people said.
Chinese authorities have been discussing the need to punish Citic Securities for its role in the summer stock rout, according to one person. President Cheng Boming is among seven Citic Securities executives named by the state-run Xinhua News Agency as under investigation in the probes that began after the market sank from June.
Cheng is accused of alleged insider trading and leaking inside information, according to Xinhua. No comment has been available from Cheng or the other Citic Securities executives. All of the seven cases involved allegations of insider trading, according to Xinhua’s reports.
Citic Group, the nation’s first state-owned investment corporation, was set up in 1979 as part of paramount leader Deng Xiaoping’s push to modernize the country. The conglomerate’s assets span finance, real estate and infrastructure.
Zhang is a former general manager and director of Citic Securities who has more recently had roles at Citic Group as director of the board office and assistant to the general manager, according to Citic Securities’ statement to the exchange.
Citic Securities faces “grueling challenges,” Wang said in a press release, adding that the firm had weathered many storms over two decades and will “eventually strengthen its foundation and move forward.” In the same release, Zhang expressed confidence in the firm’s prospects.
(An earlier version of this story corrected the spelling of Zhang Youjun’s name.)
— With assistance by Heng Xie, and Steven Yang