- Embattled brokerage elected Zhang Youjun as its new chairman
- Citic chose new board directors amid ongoing executive probes
Citic Securities Co., the Chinese brokerage that’s been the focus of government investigations after last summer’s $5 trillion stock rout, has appointed a new board of directors led by Zhang Youjun, a chairman hand-picked by its largest shareholder.
Zhang and six other executives have been appointed directors of the new board for a three-year term, the brokerage said in a statement to the Shanghai stock exchange on Tuesday.
Citic Group Corp. nominated Zhang in November to stand for election as chairman to replace Wang Dongming, whose retirement was announced by Citic Securities at the time. News of Wang’s departure came as some senior executives at the brokerage were put under investigation as part of official probes into the cause of the stock meltdown. Wang hasn’t been implicated in the investigations, and the brokerage cited the 64-year-old’s age as the reason for his retirement.
Citic Securities shares in Hong Kong lost 2.8 percent as of 10:56 a.m. local time on Wednesday, taking its slump in the past six months to 37 percent.
“Concerns that expansion plans will slow were mainly triggered by the fact that some people have left the company recently,” said Zheng Chunming, a Shanghai-based analyst at Capital Securities Corp.
Zhang said in November he aims to build Citic Securities into “an even more competitive” international investment bank in 10 years. He joined Citic Securities in 1995 and was promoted to general manager of the company in 2002. In 2005, Zhang was appointed chairman of China Securities Co., another state-owned brokerage. He was later given more roles within Citic Group and has been an assistant to the conglomerate’s general manager since October.
Wang Dongming led Citic Securities for 13 years as chairman, and oversaw the brokerage’s acquisition of CLSA Asia-Pacific Markets in 2012.
Wang told about a half-dozen shareholders in Beijing Tuesday that he remains confident about China’s capital markets and the future of the company under Zhang’s leadership. The investors pulled Wang aside for a chat that lasted about 20 minutes after he finished chairing a meeting seeking shareholder approval on the appointment of the new board.
The stock slump that began in June and dragged the Shanghai Composite Index down by 43 percent within three months prompted government rescue measures and official probes into the causes of the sell-down. Seven executives at Citic Securities including President Cheng Boming were put under investigation for alleged offences including “insider trading,” according to August and September reports by the official Xinhua News Agency.
An eighth executive has been assisting with unspecified investigations and unable to perform his duties, according to a company filing in October. None of those named has commented on the allegations and no court proceedings have been reported.
— With assistance by Aipeng Soo