THE key men in charge of Shanghai International Securities (SISCO) when it was embroiled in China's treasury bond scandal in February have been replaced. Chairman Xu Qingxiong and vice-chairman and chief executive Guan Jinsheng tendered their resignations at a directors' meeting on Tuesday. Company spokesman Song Peizhen said: 'I can't tell you when they resigned but their resignations and the new appointments were announced at the board meeting.' Veteran banker Zhu Heng, vice-governor of the Shanghai Pudong Development Bank, has replaced Mr Xu as chairman of the country's largest and most aggressive brokerage. Shanghai Waigaoqiao Free Trade Development (Holdings) general manager Gao Guofu succeeded the flamboyant Mr Guan as vice-chairman, and was appointed acting chief executive. Their appointments were effective from Tuesday. Mr Zhu was previously vice-governor of the Agricultural Bank of China's Shanghai branch. Mr Gao, a graduate of Jiaotong University, was little known in the broking community. A futures trader said: 'The resignations of Xu Qingxiong and Guan Jinsheng are only inevitable because as the top men of SISCO, they have to take responsibility for the contract 327 scandal.' Contract 327 is a three-year bond with a coupon rate of 9.5 per cent which matures in June. Trading in the contract shot up to more than 850 billion yuan (about HK$779.45 billion) on February 23, on the rumour that the Ministry of Finance would raise the subsidy rate linked to inflation. In a rising market, SISCO and two other brokerages heavily laden with short positions allegedly tried to push prices down illegally, forcing the country's stock exchanges to suspend bond futures trading for several days. As the scandal was being sorted out, the Finance Ministry actually raised the subsidy rate. Billed as China's Barings-style fraud, the scandal is now being investigated by the China Securities Regulatory Commission, the securities watchdog. Analysts said SISCO was unlikely to escape punishment despite its influence. The question is, in what form and in what degree. Meanwhile, Shanghai International (HK), the Hong Kong-listed vehicle of SISCO, said Guan Jinsheng was likely to be dismissed as its chairman. SISCO is the largest shareholder of Shanghai International, with approximately 55.35 per cent of the shares. SISCO said it intented to replace Mr Guan. Its nominee would be announced at a later date.