Photographer: Qilai Shen/Bloomberg

Seven Citic Securities Bosses Return Amid China Stock Probes

  • President Cheng Boming wasn't among those named by company
  • Probes into China stock rout entangled at least 16 people

Seven Citic Securities Co. executives who had been probed or assisted with investigations after China’s summer stock rout have returned to the brokerage or their homes.

Xu Gang

Xu Gang.

Photographer: Hu Qing/Imaginechina

The returning executives include Managing Director Xu Gang, Chief Financial Officer Ge Xiaobo and investment-banking head Chen Jun, the company said in a stock exchange filing Thursday. The employees were either assisting probes or being investigated by authorities, the company said. The statement didn’t name President Cheng Boming as among the seven.

Investigations following last summer’s stock slump ensnared at least eight senior Citic Securities staff members, officials at the securities regulator and a top fund manager. At least 16 people have been identified by the official Xinhua News Agency, the government, or their employers as arrested, under investigation or assisting the authorities.

Liu Wei, a member of the brokerage’s executive committee, and Yan Jianlin, head of international investment banking, were among the other executives who had come back, according to the filing. The returns of Xu, Ge, Chen, Liu and Yan were reported by Caixin magazine earlier Thursday.

The company’s statement also named Qi Shuguang, the head of Citic’s direct investment arm, and Chen Rongjie, director of the alternative investment department, as among the employees to return. Two calls to the company’s investor-relations department outside of regular business hours weren’t answered.

The company’s operation remains normal, according to the statement. Liu, Xu and Chen Rongjie were among four Citic Securities executives who had confessed to insider trading, Xinhua reported Aug. 31.

Criminal Law

Under China’s criminal law, a person may only be detained for 37 days, after which he or she should be allowed to post bail while awaiting trial, or be placed under residential surveillance, Caixin magazine reported earlier Thursday.

Liu hung up immediately when contacted on his mobile phone by a Bloomberg reporter, while calls to four other executives’ office lines weren’t answered.

The officials are returning as their firm installs a new board of directors led by Zhang Youjun, a chairman hand-picked by Citic Group Corp., its largest shareholder. The brokerage last month appointed Zhang amid speculation that Citic Group is planning tighter controls over the brokerage.

Shares of Citic Securities gained 2.2 percent in Hong Kong to close at HK$14.70 on Thursday, compared with the Hang Seng Index’s 1 percent increase. The brokerage has lost 19 percent over the past three months.

— With assistance by Tian Chen, and Aipeng Soo

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