BEIJING • One month after the head of a Hong Kong brokerage vanished, his whereabouts remain a mystery.
Those who suspect Mr Yim Fung, the missing chairman and chief executive officer of Guotai Junan International Holdings, was pulled in to assist the authorities with an investigation in China include Mr Christopher Cheung, a Hong Kong lawmaker who represents the finance industry. He had been due to attend a dinner with Mr Yim on the day he was reported missing.
But no one knows for sure.
Guotai Junan International said in late November it had lost contact with Mr Yim, a development that coincided with probes sweeping through China's finance industry that have entangled at least 16 people, including securities executives, a fund manager and regulators.
Last Friday, a financial magazine reported that Mr Guo Guangchang, boss of Hong Kong-listed Fosun International, one of China's most aggressive global deal-makers, could not be contacted.
Rumours of his detention sent shares of his company plunging 9 per cent in heavy trading on Monday, even as he made his first public appearance after the report by attending a meeting in Shanghai.
And in a sign that the Chinese authorities were not restricting his movement, Fosun yesterday issued a statement saying Mr Guo would attend a performance in Canada on Monday. Before that, he would be in New York on a business trip .
These cases underscore a challenge for Hong Kong: How does it maintain its reputation for transparency and rule of law, key credentials for any global financial centre, if executives can simply vanish?
Mr Yim may be under questioning in connection with his former boss, Mr Cheung said.
That man, Mr Yao Gang, a vice-chairman at the China Securities Regulatory Commission who formerly supervised initial public offerings, is under probe for "alleged serious disciplinary violations", the Communist Party's Central Commission for Discipline Inspection said on Nov 13.
The two men worked together at Guotai Junan Securities, the state-owned firm that is now the China's second-biggest brokerage by market value and which owns the Hong Kong-listed unit.
Mr Yao was general manager from 1999 to 2002 before returning to roles at the commission.
"When people are taken into custody or house arrest, there's very little transparency over that in the mainland," said Mr David Webb, a shareholder activist who is a deputy chairman of the city's takeovers panel and a former director of Hong Kong's stock exchange.
"The rule of law and disclosure is underdeveloped in China. Having an underdeveloped rule of law is a problem - markets and investment depend on the rule of law."
A protracted disappearance of Mr Yim could disrupt the firm's expansion, which has been focused on boosting its fixed-income and fund management businesses and includes plans to set up representative offices in Singapore and London, according to a person familiar with the matter, who asked not to be named as the plans are private.
"China has its own way of investigating, but they should understand that Guotai Junan is registered in Hong Kong," Mr Cheung said.
"Transparency is important to Hong Kong-listed companies."