BEIJING/HONG KONG (Reuters) – A top executive at China International Capital Corp (CICC) is set to join Chinese sovereign wealth fund CIC after exiting the investment bank to avoid a potential conflict of interest given his brother now heads China’s securities regulator, six sources said.
Wu Bo, who was most recently the president and chief financial officer of state-owned CICC, is the younger brother of Wu Qing, who took the helm of the China Securities Regulatory Commission (CSRC) in February, said the six sources with knowledge of the matter.
The CSRC supervises China’s securities sector including the $10.5 trillion stock market and a variety of capital markets activities. It is also the primary watchdog of all brokerages in China, including CICC and foreign banks’ securities ventures.
CICC said in a filing on Wednesday that Wu Bo, who joined the bank in 2004, had stepped down as president effective immediately after less than half a year in the role. He would also no longer serve as CFO or a member of the management committee due to “work changes”, the bank added, without providing further details.
The CSRC, CICC, CIC, Wu Bo and Wu Qing did not respond to Reuters’ requests for comment. The sources spoke on condition of anonymity due to the sensitivity of the matter.
China has long vowed to tighten discipline on leaders and officials, and the latest move comes against the backdrop of President Xi Jinping making sweeping changes at the country’s top regulatory bodies in recent years to improve supervision.
The country’s civil servants law, which covers the CSRC, says public servants who are immediate family members including siblings are not allowed to work in posts with direct superior and subordinate relationships.
The preparation for Wu Bo’s departure from China’s oldest investment bank started soon after his brother, nicknamed the “broker butcher”, was in a unexpected move appointed as the CSRC head amid a market rout, said three of the sources.
Wu Bo, 46, is poised to join CICC’s parent and top shareholder China Investment Corp (CIC) and take charge of some of the sovereign wealth fund’s overseas investments, which are not overseen by CSRC, they added.
CIC, owned by the State Council with total assets reaching $1.24 trillion as of end-2022, invests overseas through two subsidiaries, CIC International Co and direct investment vehicle CIC Capital Corp. It also has a domestic investment unit, China Central Huijin.
Headquartered in Beijing, the sovereign wealth fund was founded by the central government in 2007 to help the world’s second-largest economy earn a higher return on its foreign exchange reserves.
Wu Bo’s departure from CICC comes as companies scramble to scuttle plans for initial public offerings in China this year after the CSRC tightened rules on share listings in a bearish market, darkening prospects for investment banks.
In September last year, Wu Bo became the bank’s CFO and two months later, president and its de facto No. 2 executive.
His brother, Wu Qing, was a senior leader in China’s financial hub Shanghai before taking over as the CSRC chairman in February when China’s stock markets were near their weakest levels in five years.
(Reporting by Beijing, Hong Kong and Shanghai newsrooms; Editing by Sumeet Chatterjee and Jamie Freed)
