There are rumours that Li Geping is investigating a former top regulator.
Li Geping, the general manager and executive director of CSC Financial, has left the Beijing-based investment bank and brokerage house and is the subject of government investigations, according to Caixin.
Li resigned from all of his roles at the business for personal reasons, CSC Financial, which trades as China Securities and is listed in Shanghai and Hong Kong, said in a statement late on Thursday.
In addition, Li served as the CFO of CSC Financial and a member of the boards committees in charge of risk management and strategic planning.
After a board meeting at the firm on May 29, authorities removed the executive, according to various people who spoke to Caixin.
According to a source with knowledge of the situation, he is aiding law enforcement with an investigation, albeit the specifics remain undisclosed.
According to a source close to CSC Financial, the probe is not about CSC Financial specifically but rather his time serving in the regulatory system.
On Thursday, Caixin called Li’s cell phone but got no response.
Li may be engaged in the investigation against Zhu Congjiu, a former assistant chairman of the China Securities Regulatory Commission (CSRC), according to a number of industry insiders. Zhu Congjiu was under investigation in early May.
Beijing is increasing oversight of the vast banking industry while pledging to “resolutely” combat corruption.
Over the last several years, many former CSRC officials have been the subject of corruption investigations.
Amid rumours that he was also under investigation, Wang Qingshan, president of Zheshang Securities and a former subordinate of Zhu at the CSRC, resigned in the middle of May.
Li, 56, has more than 10 years of experience in the regulatory system and has a wealth of knowledge in the financial industry.
He maintained a sizable personal network from his 20 years in the securities business and regulatory agencies, and he continued to be discrete and circumspect, according to a source acquainted with him.
Li began working for the Hubei branch of the People’s Bank of China (PBOC), the country’s central bank, in 1992. Later, he moved to Hubei Securities, a brokerage house established by the PBOC and the provincial administration of Hubei.
Hubei Securities underwent a restructuring in the years that followed to become independent of the PBOC, and it changed its name to Changjiang Securities in 2000.
The same year, Tao Shusheng, who was embroiled in corruption issues, was replaced as president of Changjiang Securities by Li.
Li changed his focus in June 2011 and assumed leadership of the Securities Association of China as secretary-general.
Later on, he was appointed deputy director of the CSRC’s institutional oversight division.
Li was appointed director of Central Huijin Investment’s nonbanking division in 2016, the domestic investment division of China Investment Corp., the country’s sovereign wealth fund.
Li departed Central Huijin in 2018 to take the general manager position at CSC Financial, which was getting ready to sell shares in Shanghai.
When CSC Financial was first established in 2005, Citic Securities, a division of state conglomerate Citic Group, held 60% of the company, while a Central Huijin subsidiary owned the other 40%.
To comply with regulatory requirements, Citic Securities has progressively sold off its interest in CSC Financial since 2009.
With a 34.6 percent ownership in CSC Financial, state-owned Beijing Financial Holding Group is now the biggest stakeholder, followed by Central Huijin (30.8 percent) and Citic Securities (4.97 percent).
CSC Financial recorded a net profit of 7.5 billion yuan ($1 billion) in 2022, a decrease of 26.7 percent from the year before.