State-owned CITIC Group Corporation, the largest shareholder of CITIC Securities, has named Zhang Youjun as a candidate for chairman. (Photo : www.scmp.com)
CITIC Securities Co., China's largest securities brokerage, has announced on Tuesday, Nov. 17, that its chairman is retiring, raising questions about the direction of the firm amid the current government probe on alleged insider trading, the China Daily reported.
In a statement to the Shanghai Stock Exchange, the securities firm said that Wang Dongming, 64, will step down from his position as chairman "for the reason of his age."
The report said that Zhang Youjun, 50, a senior executive of the group, has been named by the state-owned CITIC Group Corporation, the largest shareholder of the firm, as a candidate to be the new chairman. The statement said that Wang will continue to serve as the chairman until the next board election.
The personnel changes at CITIC Securities came as several top executives of the firm, including its general manager Cheng Boming, are facing government probes for possible market malpractices.
The report said that the brokerage, one of those responsible for the summer market rout that erased $5 trillion off the market's value, has been charged with using advance knowledge of the government's market rescue plan to its own advantage.
Bloomberg, citing sources close to the firm, said on Tuesday that its parent company CITIC Group will have tighter control of the brokerage and will likely continue a restricting and personnel shake-up within the firm.
A CITIC Securities press officer in Hong Kong told Bloomberg that the election of a new board would mark a "new chapter" for the company, but declined to comment on any tightening of CITIC Group's control or plans for restructuring.
Industry analysts said that the latest government investigations and departures of key executives of CITIC Securities could have substantial impact on the future business development of the brokerage firm.
"Chinese securities firms are heavily reliant on a few key people in the management team. Their departures can even have a disruptive influence. But the rigid and modern internal system at CITIC Securities could help mitigate some of the negative effects," an analyst at a leading global consulting firm said on condition of anonymity.
