Xi’s Crackdown Continues: Another Tech Tycoon Goes Missing In China

Last week, the Chinese tech sector was shocked by the disappearance of another tycoon. Bao Fan, founder of one of the leading investment banks in the country, China Renaissance, was announced missing in a company filing. For years, Bao’s company has been one of the key players when it was about financing Chinese tech companies. 

The disappearance is being seen as an extension of the crackdown launched by President Xi Jinping almost two years ago. The crackdown spree began with Jack Ma’s Ant Group whose initial public offering (IPO) was suspended a few days before listing. 

This followed a new-antitrust decree from Beijing for China’s internet companies, some with more than a billion users. Investigation into Alibaba’s anti-monopoly practices landed the company with a fine of more than 18 billion yuan. 

Meituan, one of the biggest food and retail delivery services, was then under a probe from Beijing for poor worker conditions and anti-monopoly practices. 

This was followed by a stern crackdown against Didi, China’s version of Uber, but much bigger than Uber, as the company aimed to raise more than $4 billion from foreign listings. Citing data security reasons, Beijing ordered a probe into the company.

Beijing then dropped a bomb on the country’s private education sector, valued at around $100 billion. The party hinted at banning academic tutors from making any profit. 

The memo extended to home-schooling and off-campus education companies, ordering them to register for a non-profit status and also disallowing approval of any new private educators by the local authorities. Restrictions were also speculated on foreign capital investments in the sector.

Bao’s absence from China Renaissance could usher a new set of problems. For starters, the share price of the company has already plunged by almost 30 per cent. Two, as the face of the bank, Bao was the man behind completing complicated deals in the tech sector, and his absence is expected to impact other companies as well. 

Bao, who started China Renaissance in 2005, was at the heart of the financing sector across 2000s and 2010s, and eventually got close to the state-owned enterprises as well. The likes of Tencent, Alibaba, and Didi have been clients of the Bao’s investment bank, availing several financial services, from mergers and acquisitions to IPOs.