China Missing Banker’s Firm Delays 2022 Results, Halts Trading

(Bloomberg) — China Renaissance Holdings Ltd. said it’ll suspend trading of its shares from Monday and delay the release of its audited results for 2022, as the investment bank failed to get in touch with Chairman Bao Fan who was cooperating in an investigation by Chinese authorities.

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The firm said auditors haven’t been able to complete their audit and sign off on its earnings report with Bao unavailable for contact, according to its exchange filing late Sunday. The board is also unable to estimate when it will be able to approve its audited results or dispatch the annual report on or before the April 30 deadline.

The announcement came as the investment bank posted an unaudited loss of 563.8 million yuan ($82 million) for 2022, compared with a net income of 1.6 billion yuan a year earlier. Trading resumption will depend on when it can publish the annual results, the firm said.

The latest development underscores key man risks among Chinese companies, where founders often play an outsized role. China Renaissance has said that Bao’s status as both Chairman and chief executive has “the benefit of ensuring consistent leadership” and “more effective and efficient overall strategic planning” for the company, it said in its 2021 earnings report and reiterated in the latest announcement.

The board will consider splitting the roles of Chairman and Chief Executive Officer when appropriate after taking into the circumstances, it said in the filing.

The company’s shares had plunged as much as 32% since Bao was first reported to be missing, and remain more than 10% down this year.

Bao has sprawling connections and is privy to information related to the country’s biggest entrepreneurs. His company has advised tech giants including Alibaba Group Holding Ltd. and Tencent Holdings Ltd.

His disappearance since mid-February has unnerved China’s business elite and fueled doubts over whether President Xi Jinping’s crackdown on the private sector has run its course.

Despite Beijing’s reassuring comments on private businesses to support a post-Covid recovery, Bao’s troubles continue to spur concern among the country’s business community and global investors.

A former banker at Morgan Stanley and Credit Suisse Group AG, Bao founded China Renaissance in 2005, making a name for the firm by brokering tough mergers that led to the formation of ride-hailing service Didi Global Inc. and food-delivery giant Meituan.

Bao had been placed under a special form of detention since February for links to an earlier investigation into Cong Lin, China Renaissance’s former president, the Wall Street Journal reported in early March. Cong had been involved in a probe by authorities since September, Bloomberg News reported in February.

China Renaissance has conducted a round of job cuts as part of its “organizational restructuring” to streamline operations, the Financial Times reported last month.