China Renaissance says missing founder ‘co-operating’ in government probe

China Renaissance said its missing founder Bao Fan was “co-operating in an investigation” with Chinese authorities, more than a week after the investment bank disclosed it had been unable to contact him.

In a terse stock exchange filing late on Sunday in Hong Kong, the company said its board had “become aware that Mr Bao is currently co-operating in an investigation being carried out by certain authorities in the People’s Republic of China”.

The disappearance of Bao, a former Morgan Stanley and Credit Suisse banker famed for wheeling and dealing on behalf of the most powerful corporate groups in China’s technology sector, has cast a pall over the industry just as it appeared set to draw a line under a protracted regulatory crackdown by Beijing.

Bao rose to prominence through China Renaissance, founding the boutique tech investment firm in 2005 to provide initial public offering and other capital markets services to the country’s rising tech stars.

The board of the investment bank said its operations “are continuing normally”. It added that the company “will duly co-operate and assist with any lawful request from the relevant PRC authorities, if and when made”.

Hong Kong-listed shares in China Renaissance have fallen 29 per cent since it revealed on February 16 that it was unable to contact Bao, the face of the investment bank and its main rainmaker thanks to his personal relationships with many of China’s tech billionaires.

But the steady business provided by those ties has dried up in recent years during a period of intense regulatory scrutiny for the sector that began shortly after ride-hailing group Didi Chuxing’s botched New York listing, on which China Renaissance served as bookrunner.

Didi pushed ahead with its $4.4bn share sale in 2021 despite national security concerns from regulators, and the group was forced to delist in June last year.

Bao’s involvement in a government investigation also makes him the second executive at China Renaissance to be summoned by authorities in relation to an official probe.

In September, China’s securities regulator demanded that Cong Lin, the bank’s president and head of its securities unit, came in for a “supervisory discussion”. Cong exited key positions at the securities unit within days and was detained by Chinese authorities around that time.

Cong was hired by China Renaissance after playing a key role in a strategic partnership between the investment bank and ICBC International, a division of China’s state-run bank ICBC.

As part of that partnership, announced in 2017, ICBC International provided a $200mn credit line to China Renaissance backed by pledged shares in the investment bank, with the stipulation that the funds be paid back soon after its Hong Kong listing.