China Renaissance Holdings Ltd. announced on Sunday that it will suspend trading of its shares starting Monday and delay the release of its audited results for 2022.
The investment bank cited the unavailability of Chairman Bao Fan, who is currently cooperating with an investigation by Chinese authorities, as the reason for the delay.
In an exchange filing late Sunday, the firm stated that auditors have been unable to complete the audit and sign off on its earnings report due to Bao’s absence. The board is also uncertain about when it will be able to approve the audited results or dispatch the annual report by the April 30 deadline.
The announcement comes as China Renaissance reports an unaudited loss of 563.8 million yuan ($82 million) for 2022, compared to a net income of 1.6 billion yuan in the previous year. The resumption of trading will depend on when the annual results can be published.
This development highlights the risks associated with key personnel in Chinese companies, where founders often have significant influence.
China Renaissance has previously stated that Bao’s dual roles as Chairman and CEO ensure consistent leadership and more effective strategic planning for the company. However, given the current circumstances, the board will consider splitting these roles when appropriate.
Since the initial reports of Bao’s disappearance, the company’s shares have dropped as much as 32% and remain over 10% down this year. Bao, who has extensive connections and access to information regarding China’s largest entrepreneurs, has advised tech giants such as Alibaba Group Holding Ltd. and Tencent Holdings Ltd.
Bao’s disappearance since mid-February has caused unease among China’s business elite and raised doubts about the end of President Xi Jinping’s crackdown on the private sector.
Despite Beijing’s reassurances regarding private businesses, Bao’s situation continues to generate concern among the Chinese business community and global investors.
Bao, a former banker at Morgan Stanley and Credit Suisse Group AG, founded China Renaissance in 2005. He gained prominence by facilitating complex mergers that led to the creation of the ride-hailing service Didi Global Inc. and food-delivery giant Meituan.
Bao has been under a special form of detention since February due to links with an earlier investigation into Cong Lin, China Renaissance’s former president.
The investment bank has recently conducted job cuts as part of its organizational restructuring to streamline operations, as reported by the Financial Times last month.
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