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Bank president Mao Xiaofeng resigned on Saturday after he was said to have been taken away by the Central Commission for Discipline Inspection. Photo: Reuters

Minsheng stock tumbles after president resigns

China Minsheng Bank’s shares dropped yesterday as the president of the country’s largest private lender resigned on Saturday amid reports of a graft probe.

China Minsheng Bank’s shares dropped yesterday as the president of the country’s largest private lender resigned on Saturday amid media reports that he had been taken away to assist  mainland anti-graft investigators.

Separately, Bank of Beijing said in a filing last night a board member had been taken away for investigation into a serious breach of discipline.

Minsheng  shares fell  10.5 per cent to  a  low of HK$8.46, before cutting their losses to close down 3.07 per cent at HK$9.16. In Shanghai, the stock slid 3.2 per cent to  9.17 yuan (HK$11.50).

“The long-term impact towards the stock was unquantifiable since there was little clarity whether the Chinese authorities will prosecute Mao [Xiaofeng]  and how Anbang  will run the operation of the Chinese lender,” said Ben Kwong Man-bun,  a director of broker KGI Asia.

Shi Yuzhu,  the chairman of Giant Interactive,  a Chinese game developer and operator,  warned that the new president should be competent and capable of running the bank’s operations as the former president lacked relevant skills. Shi, a  major shareholder of Minsheng Bank, did not name the former head.

Mao has been taken in for questioning  as part of a corruption investigation into Ling Jihua,  an aide to former president Hu Jintao,  Caixin reported.

“Due to the change in management, and the unverified impact of having Anbang as its controlling shareholder, we downgraded the rating on Minsheng  to neutral from buy,” Bank of America Merrill Lynch  said  yesterday, adding  the target price was cut  to HK$10.32 from HK$11.60.

Minsheng announced that the chairman, Hong Qi, would become the acting president, adding that Mao had resigned due to “personal reasons”.

According to the People’s Daily, the lender issued a  memo on Friday asking employees to stand by for a possible emergency at the weekend.

Minsheng, founded in 1996, is the country’s first private lender.  Investors include  insurance firm Anbang, which recently bought New York’s iconic Waldorf Astoria hotel.  

Beijing-based Anbang, the largest shareholder of Minsheng, holds a 22.51 per cent  stake in the company’s A shares and a 5.18 per cent  stake in its H shares, after buying shares in the market  for the past three months.

This article appeared in the South China Morning Post print edition as: Minsheng stock tumbles after president resigns
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