Chinese Brokerage Head Targeted in Probe by Communist Party

Updated on
  • Changjiang Securities case adds to wave of probes in finance
  • No comment available from Yang Zezhu, who faces investigation

The chairman of mid-sized Chinese brokerage Changjiang Securities Co. is under investigation by the Communist Party, further swelling the line-up of financial industry executives and regulators facing probes by the party or the police.

Yang Zezhu, who’s in his early 60s, is suspected of violations of discipline for “personal reasons,” the company told Shenzhen’s stock exchange in a statement on Wednesday. Changjiang was informed in a notice from the party’s discipline inspection committee in Hubei province on Tuesday, it said.

Yang couldn’t be contacted through the company for comment.

The case adds to investigations over the past year that have entangled finance industry figures including securities regulators and senior executives at Citic Securities Co., the nation’s biggest brokerage.

Billionaire Investor

Last April, billionaire art collector and investor Liu Yiqian agreed to buy a 14.7 percent stake in Changjiang from Qingdao Haier Investment & Development Co. for 10 billion yuan ($1.5 billion). In October, the brokerage said that transaction still needed approval from the China Securities Regulatory Commission.

Investigations within the finance industry expanded after a stock rout that triggered unprecedented government support measures -- and pledges by the authorities to target so-called malicious short-sellers and “purify” the market.

In November, the disappearance of Yim Fung, the head of a Hong Kong-listed unit of a Chinese brokerage, drew attention to the probes. Yim turned up in late December. The unit, Guotai Junan International Holdings Ltd., said that he’d been assisting with investigations -- and that neither he nor the company were under scrutiny.

Changjiang Securities said it’s operating normally and Zheng Chunming, a Shanghai-based analyst at Capital Securities Corp., said that Yang’s case may have only a limited effect on the company.

The company’s stock fell 1.5 percent as of 9:59 a.m. local time, while Shenzhen’s benchmark gauge was up 1.5 percent.

During 2015, those caught up in probes within the finance industry also included Xu Xiang, known as “hedge fund brother No. 1” for his knack of timing stock swings. No comment has been available from Xu, or others facing investigations.

— With assistance by Aipeng Soo

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