FAST NEWS: China Renaissance Says Chairman’s Disappearance Due to Assistance in Investigation
The latest: Venture capital firm China Renaissance Holdings Ltd. (1911.HK) said on Sunday it has ascertained that its chairman and controlling shareholder Bao Fan, who disappeared two weeks ago, is currently cooperating in an investigation by authorities in China.
Looking up: The announcement appears to corroborate earlier reports that Fan himself wasn’t suspected of a crime, but instead may be helping to answer questions about someone else suspected of criminal behavior.
Take Note: The news of Bao’s disappearance was announced on Feb. 16, but Renaissance only disclosed 10 days later that he was cooperating with the government’s investigation. That might be considered too slow, and could lead to continued investor concerns about whether Bao will eventually return to the company.
Digging Deeper: Bao is China Renaissance’s controlling shareholder, holding 48.76% of its shares directly or through entities he controls. He is known for his accomplishments in China’s venture capital community, and is sometimes called the country’s “king of M&A”. The company confirmed late on Feb. 16 that Bao could not be reached. After the news broke, the company’s shares dived as much as 50% the next day before rebounding a bit to close down 26%. Some reports citing information provided by inside sources said his disappearance was related to misconduct involving former Renaissance Chairman Cong Lin, suggesting Bao was not personally suspected of any crimes but instead was assisting in the investigation of Cong.
Market Reaction: After opening 9% higher, China Renaissance shares gave back some of those gains on Monday morning and closed up 3.4% at HK$7.34 by the midday break. But the stock is still 26.6% below its price of HK$10 before Bao’s disappearance was first announced.
Translation by Jony Ho
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