Six Citic Securities Bosses Involved in Stock Probe Left RolesBloomberg News
Former President Cheng Boming among those whose tenures ended
Citic chairman calls probes "biggest test" in firm's history
Six Citic Securities Co. executives who were caught up in a government investigation into the causes of last year’s $5 trillion stock rout have left their positions at China’s biggest brokerage.
Former President Cheng Boming was among those who relinquished their roles on Jan. 19 when a new board was elected, according to Citic Securities’s 2015 annual report, which was released yesterday. Former executive committee members Xu Gang, Liu Wei, Chen Jun, Ge Xiaobo and Yan Jianlin also left, the report showed.
The company had said last month the five executive committee members had returned after either being investigated or after assisting with probes. Cheng, who hasn’t been reachable for comment, was being investigated for alleged insider trading and leaking inside information, the official Xinhua News Agency reported Sept. 15, citing police. There was no indication that any of them have been charged with wrongdoing.
Ge, who had previously been chief financial officer, said in a mobile-phone text message that he was still a Citic Securities employee and left his executive role because his term had expired. Xu and Liu didn’t immediately respond to attempts to reach them on their mobile phones, while contact details were unavailable for Chen and Yan. A spokeswoman for the brokerage declined to comment.
The changes, which were disclosed in a table depicting information related to senior management such as salaries and shareholdings, hadn’t been made public previously. They’re the latest development in what Zhang Youjun, the firm’s chairman since January, described in the annual report as the “biggest test” in the history of the firm.
At least 16 people had been identified by the official Xinhua News Agency, the government, or their employers as arrested, under investigation or assisting the authorities in the probes that followed last summer’s stock slump.
Before their return, Citic’s Liu and Xu were among individuals who had confessed to alleged insider trading, Xinhua reported Aug. 31. In December, before their return, the brokerage said it couldn’t reach Chen and Yan, as it noted media reports mentioning they may be assisting with probes. Before his return, Ge was assisting with investigations and unable to perform his duties normally, Citic said in a statement to Hong Kong’s stock exchange on Oct. 29, without giving more details.
Separately, the Citic Securities annual report showed that the firm had set aside 109.9 million yuan ($17 million) to cover potential losses on a 29.4 billion yuan portfolio that mostly consisted of 21.1 billion yuan it had contributed to a market-support fund managed by China Finance Securities Corp. The provisions were equivalent to only 0.5 percent of the firm’s operating profit.
Citic Securities’s contributions to the rescue fund in July and September amounted to 20 percent of its net assets, the brokerage said on Sept. 2. The book value of the 29.4 billion yuan portfolio had declined by 2 percent to 28.76 billion yuan by the end of the year, according to the annual report.
— With assistance by Aipeng Soo