"High Profile" CEO Of China Brokerage "Disappears": "Company Says Can't Find Him"

On Sunday evening, George Chen delivered what, for those who follow financial markets, surely was a candidate for Tweet of the day:

Yes, "company said can't find him," and given China's recent "crackdown" on anyone suspected of engaging in activities that might send stocks lower, you know what that means:

As we outlined in September, Beijing's "kill the chicken to scare the monkey" campaign has brokers, hedgies, and even securities regulators so terrified, that one money manager said the following to his friend after being "summoned" by Chinese authorities: "If I don't come back, look after my wife."

Earlier this month, WSJ took a look at China's case against Xu Xiang, who runs Shanghai-based Zexi Investment. Xu is accused of insider trading and stock manipulation and not only did Beijing detain him, they also froze his parents' accounts. "After Xu Xiang was arrested, many people got nervous,” one fund manager told The Journal. "I don’t want to get arrested,” said another. 

Around the same time the media picked up on the Xu story, another CSRC official was arrested in China. Yao Gang, vice chairman of the securities regulator, is now under investigation for graft, Reuters reported a little over a week ago, noting that Yao is the second official from the capital markets watchdog to come under scrutiny. 

This is the backdrop against which Guotai's Chairman and CEO Yim Fung went "missing" on November 18. 

Guotai was forced to find temporary replacements for Yim as "the executive currently cannot discharge his duties." Calls to Yim’s cell went to his voicemail box.

Guotai Junan International Holdings Ltd. shares fell double digits in Hong Kong to close at HK$2.85 on Monday. It was the steepest slide in three months. 

As Bloomberg reports, "Hong Kong-based, Yim has a high profile in the local securities industry, including through his comments to the media and as chairman and then honorary chairman of the Chinese Securities Association of Hong Kong. In China, Yim is known as Yan Feng." 

Well as it turns out, Yim and Yan and any other aliases were "taken away" in connection with the investigation into the above mentioned Yao Gang.

So apparently, China is going to assert that corrupt officials at the securities watchdog may have been working with Guotai's CEO to manipulate stocks. Or at least that's the way this looks. 

For now, Yim has been replaced by deputy CEO Wong Tung Ching, which would be fine we suppose were it not for the fact that last December, Hong Kong anti-corruption officials stormed his home in connection with an ICAC investigation. In other words, we wouldn't be surprised if Guotai soon finds its deputy CEO "missing" as well.