What a difference a few days can make in Chinese banking. Last week, CITIC Securities looked like the type of firm any ambitious mainland investment banker would jump through hoops to join. It topped a new Dealogic ranking for year-to-date China investment banking revenue. And it announced that Liu Jun, head of its asset management division, was taking charge of its brokerage business. We also revealed last week that CITIC pays its employees the most – 716,420 RMB (about $111.7k) per head per year – of any Chinese brokerage.
Yesterday, however, some of the gloss came off CITIC’s sucessful image – the firm is now under regulatory investigation for possible insider trading and falsification of information, according to Chinese media. Authorities have reportedly detained several people, including CITIC employees, a regulator, and a journalist.
Most surprisingly, Xu Gang, an influential veteran banker who was the chairman of CITIC’s brokerage department until Liu took over last week and is the current boss of its research unit, was reportedly among those detained. Chinese media have recently referred to CITIC as China’s Goldman Sachs, so by that reasoning Xu’s detention is akin to Lloyd Blankfein being frogged marched from his office. In hindsight, Liu’s takeover of the brokerage business was more than just a management reshuffle.
It’s not just at CITIC where watercooler conversions among brokers could be a little tense this week. Haitong Securities, GF Securities, Huatai Securities and Founder Securities are all being probed by the China Securities Regulatory Commission for suspected failure to review and verify clients’ identities. So far no employees of those firms have been reprimanded, but Chinese authorities certainly seem determined to find scapegoats for the current market chaos in the country.
Meanwhile:
Currency trading is becoming more difficult due to uncertainty over China, says UBS Asia FX head. (Bloomberg)
Malaysian regulator hires veteran BAML banker Azhar Zabidi. (The Star)
UK bankers’ bonuses in biggest drop for a decade. (Financial Times)
China Cinda bids for Nanyang Commercial. (Wall Street Journal)
What does the “two-thirds Singapore core” mean, exactly? (Channel News Asia)
Maybank looks to expand its operations in the Philippines. (Deal Street Asia)
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