China Renaissance Sheds Light on Whereabouts of Missing CEO Bao Fan, State-owned Media Speculates Cong Lin’s Ship Leasing Operations to Blame

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Hong Kong-listed Chinese investment bank China Renaissance has issued a public statement on the whereabouts of chairman and CEO Bao Fu, following his sudden disappearance last week.

According to statement released by China Renaissance on 26 February, Bao is currently under investigation by Chinese authorities, and in the process of cooperating with related proceedings.

“The Board has been informed that Mr. Bao is currently cooperating with the investigation of the relevant Chinese authorities,” China Renaissance said.

“The Board reiterate that the current business and operations of the Group remain normal. If any relevant Chinese authorities require the Company to cooperate in accordance with the law, the Company will cooperate with such investigations.”

The statement from China Renaissance arrives after domestic and overseas media reports stating that persons close to Dao had lost contact with him last week last week.

Bao Fan first founded China Renaissance in 2005, after previously serving as the chief strategy officer of AsiaInfo Technology (Group), and has seven years of experience in the investment banking sector on Wall Street, having previously worked for Morgan Stanley and Credit Suisse.

Bao prides himself on being a pioneer in modern Chinese investment banking. “When I started my business, I said that I would create an investment bank operated by Chinese people themselves,” Bao once said in an interview. “Many people said I was crazy and that it was impossible for a private enterprise to engage in investment banking (in China). At that time, I had no money, but it didn’t matter.”

China Renaissance, which is listed in Hong Kong, has positioned itself as a “comprehensive financial services institution,” with operations covering investment management, private equity financing, mergers and acquisitions, securities issuance and underwriting, securities research and trading, wealth management and other services.

The company has an international reach, with offices in Beijing, Shanghai, Hong Kong, Singapore and New York, and over 700 employees.

Private equity investment is the main pillar of China Renaissance’s operations, primarily covering the technology, healthcare and corporate services sector.

China Renaissance has also obtained multiple licenses from Chinese financial regulators, covering operations including investment banking, fixed income, asset management, wealth management, securities brokerage, and securities research.

Bao Fan remains the key figure behind China Renaissance holds 49.36% of equity in the company. As of February 17, China Renaissance’s market capitalisation was 4.1 billion Hong Kong dollars.

The company’s post-pandemic performance had been strong until 2022, with net profit increasing by 56.5% year-on-year (YoY) to 1.624 billion yuan in 2021.

In 2021, China Renaissance took part in 14 share listings, for companies including JD Logistics, Kuaishou, SenseTime, Bairong Yunchuang, BOSS Zhipin, Ideal Auto, Xintong Medical, Nawei, Kemei Diagnostics, Zhihu and Daily Youxian. It achieved an exit return multiple of 3.6, while net investment income reached 474 million yuan.

China Renaissance came under pressure last year, however, with its 2022 H1 report stating that the Hong Kong and US IPO markets and the secondary markets had sunk to a decade-long nadir.

As of the end of June 2022, China Renaissance reported total income of 604 million yuan, a total income and net investment income of 512 million yuan, and a net loss of 154 million yuan. The asset management scale of China Renaissance’s asset management business at the end of the period was 48.6 billion yuan, which was relatively stable compared with the end of the previous year.

While Chinese officials have yet to make a public statement about reasons for Bao Fan’s disappearance, state-owned media outlets have reported that it could be in relation to the illegal activities of Cong Lin (丛林), the former president of China Renaissance, in the ship leasing business.

Cong Lin assumed the role of president of China Renaissance in July 2020, after previously holding senior roles with ICBC Financial Leasing and ICBC International.

In October 2017, China Renaissance reportedly took out a loan of US$200 million from ICBC Leasing, before repaying the loan in September 2018, after making its debut in the Hong Kong stock market that month. In September 2022, Cong Lin was detained by Chinese authorities and placed under investigation.