Shanghai Securities vice chairman to join rival

15 August 2014   Category: News, Asia, China, Global   By Hui Ching-hoo

Shanghai Securities Vice Chairman Huang Hua is set leave the firm to join rival Qilu Securities, according to China Business News

The move follows the China Securities Regulatory Commission (CSRC) approving the acquisition of the Shanghai-based securities brokerage by Guotai Junan Securities.

Mr. Huang will reportedly join Qilu Securities as vice president in September. Shanghai Securities’ General Manager Gong Dexiong is speculated to replace him.

The CSRC in July gave Shanghai International Group (SIG) the green light to transfer a 51% stake in Shanghai Securities to Guotai Junan in a deal worth 3.57 billion RMB (US$571 million). SIG currently owns controlling stakes in both companies.

The acquisition is part of Guotai Junan’s plans for an IPO, which would otherwise be prevented by the CSRC’s “sharing a company and holding a company” policy. This stops a securities house from going public if its parent company owns controlling stakes in more than one securities brokerage.

By acquiring Shanghai Securities, it can effectively circumvent these rules. Guotai Junan was previously forced to shelve an IPO in 2007 because of the implementation of this policy.