ANTI-CORRUPTION CRACKDOWN
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Xi Jinping's anti-graft campaign

Guotai Junan shares surge after missing chairman Yim Fung returns

Guotai Junan International says chairman was ‘assisting’ investigators

PUBLISHED : Wednesday, 23 December, 2015, 4:55pm
UPDATED : Monday, 04 January, 2016, 12:40pm

The missing chief executive of Guotai Junan International, who disappeared last month in mysterious circumstances, has returned to work after “assisting” authorities in an investigation, the company said in a filing to the Hong Kong stock exchange on Wednesday.

Yim Fung, 52, chairman and chief executive office of the Hong Kong-based firm, “had been assisting in certain investigations [in his personal capacity] carried out by mainland authorities when he was unable to be reached,” the statement said, referring to his disappearance last month.

Shares of Guotai Junan International, the overseas arm of Chinese broker Guotai Junan Securities, surged 8.1 per cent to close at HK$2.82 in Hong Kong.

Neither Yim himself nor the company was the subject of the investigation, the company said, without elaborating on the details of the probe.

Yim will resume his duties as chairman and chief executive officer from Wednesday, it added.

It is the first time Guotai Junan International has given an official explanation on Yim’s disappearance since November 23, when it announced they were unable to contact Yim.

Prior to Wednesday’s session, the company’s shares had fallen 20 per cent since late November.

The mysterious nature of Yim’s disappearance coincides with a period in which the government is focusing on the financial sector in its anti-corruption crackdown.

Two sources said the investigations that Yim assisted were targeted at Yao Gang, vice chairman of China Securities Regulatory Commission (CSRC), but it wasn’t known whether the Communist Party’s anti-graft body was trying to uncover evidence about Yao’s role in the market rout in mid-June or whether it may be related to another matter.

Yao, 53, led Guotai Junan Securities from 1999 to 2002, a period when he came to trust his younger colleague Yim.

Beijing has been resolute in its pursuit of “malicious short-sellers” and corruptive officials deemed responsible for the stocks tailspin in mid-June that wiped out as much as US$4 trillion in market capitalisation, prompting official to set up a 1 trillion yuan (HK$1.2 trillion) rescue fund.

Last month, Yao was taken away by the investigators for “serious disciplinary violation,” following a probe into Zhang Yujun, an assistant chairman of the CSRC in September.

“As a senior securities regulator, Yao’s role in the market rout is the focal point of the investigations,” said one source close to the CSRC. “The investigators would try to find out whether he had leaked key information about the government’s rescue efforts or directed powerful institutions to pare their holdings.”

Beijing launched investigations into brokerages and other financial groups following the disorderly sell-off in the domestic stock market, which saw shares tumble more than 40 per cent between June and September.

A Hong Kong permanent resident and functional-constituency vote holder, Yim - also known as Yan Feng - is a well-known fixture in the city’s business community.

In recent months, there have been several mysterious disappearances of senior corporate executives inside China, which are often left unexplained.

The missing chief executive of Guotai Junan International, who disappeared last month in mysterious circumstances, has returned to work after “assisting” authorities in an investigation, the company said in a filing to the Hong Kong stock exchange on Wednesday.

Yim Fung, 52, chairman and chief executive office of the Hong Kong-based firm, “had been assisting in certain investigations [in his personal capacity] carried out by mainland authorities when he was unable to be reached,” the statement said, referring to his disappearance last month.

Shares of Guotai Junan International, the overseas arm of Chinese broker Guotai Junan Securities, surged 8.1 per cent to close at HK$2.82 in Hong Kong.

Neither Yim himself nor the company was the subject of the investigation, the company said, without elaborating on the details of the probe.

Yim will resume his duties as chairman and chief executive officer from Wednesday, it added.

It is the first time Guotai Junan International has given an official explanation on Yim’s disappearance since November 23, when it announced they were unable to contact Yim.

Prior to Wednesday’s session, the company’s shares had fallen 20 per cent since late November.

The mysterious nature of Yim’s disappearance coincides with a period in which the government is focusing on the financial sector in its anti-corruption crackdown.

Two sources said the investigations that Yim assisted were targeted at Yao Gang, vice chairman of China Securities Regulatory Commission (CSRC), but it wasn’t known whether the Communist Party’s anti-graft body was trying to uncover evidence about Yao’s role in the market rout in mid-June or whether it may be related to another matter.

Yao, 53, led Guotai Junan Securities from 1999 to 2002, a period when he came to trust his younger colleague Yim.

Beijing has been resolute in its pursuit of “malicious short-sellers” and corruptive officials deemed responsible for the stocks tailspin in mid-June that wiped out as much as US$4 trillion in market capitalisation, prompting official to set up a 1 trillion yuan (HK$1.2 trillion) rescue fund.

Last month, Yao was taken away by the investigators for “serious disciplinary violation,” following a probe into Zhang Yujun, an assistant chairman of the CSRC in September.

“As a senior securities regulator, Yao’s role in the market rout is the focal point of the investigations,” said one source close to the CSRC. “The investigators would try to find out whether he had leaked key information about the government’s rescue efforts or directed powerful institutions to pare their holdings.”

Beijing launched investigations into brokerages and other financial groups following the disorderly sell-off in the domestic stock market, which saw shares tumble more than 40 per cent between June and September.

A Hong Kong permanent resident and functional-constituency vote holder, Yim - also known as Yan Feng - is a well-known fixture in the city’s business community.

In recent months, there have been several mysterious disappearances of senior corporate executives inside China, which are often left unexplained.

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