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China bans Nomura senior investment banker from leaving mainland -sources

Alex Harsha
Alex HarshaSep 26, 2023, 5:31 AM
China bans Nomura senior investment banker from leaving mainland -sources

HONG KONG (Reuters) – Authorities in China have ordered a senior Nomura Holdings banker overseeing the firm’s investment banking operations there not to leave the mainland, two sources with knowledge of the matter said.

The ban comes as concerns grow among Western businesses about darkening prospects in the world’s second-largest economy at a time of slowing growth, coupled with new laws that make for tougher operating conditions.

Charles Wang Zhonghe, China investment banking chairman at Nomura, is prohibited from travelling outside the mainland, said the sources, who sought anonymity as they were not authorised to speak to media.

It was not immediately clear when the exit ban took effect. Wang was based in Hong Kong, his LinkedIn profile showed, though his nationality was not immediately known.

A Tokyo-based spokesperson for Nomura declined to comment. Wang did not respond to a Reuters request for comment sent via the LinkedIn social network.

The Financial Times newspaper, which first reported the matter, citing sources, said the ban was connected to China’s investigation into top tech dealmaker Bao Fan and his former colleague Cong Lin.

Beijing is investigating Cong, former president of China Renaissance Holdings, which resulted in the investment bank’s founder Bao being taken away in February, a development that stunned the business community.

Cong was believed to be facing investigation for suspected wrongdoing while he was chief executive of ICBC International, a unit of state-owned Industrial and Commercial Bank of China Ltd (ICBC), Reuters and some media said in February.

Nomura’s Wang had an overlap with Cong at the unit from 2011 to 2016, his LinkedIn page shows. Wang is assisting the authorities with their investigation of Cong, for which he needs to stay on the mainland, one of the sources said.

Asked why the Nomura banker was barred from leaving, Chinese foreign ministry spokesperson Wang Wenbin said he did not have knowledge of the situation at a regular news briefing on Monday.

Wang added, “I would like to reiterate that China has always been committed to providing a market-oriented, legalised and internationalised business environment for foreign enterprises to operate legally.”

Earlier this year, foreign firms were rattled by Chinese authorities’ raids on U.S. consultancy firms Bain & Company and Mintz Group. Last month, Beijing fined Mintz about $1.5 million for doing “unapproved statistical work”.

Scores of Chinese and foreigners have been ensnared by exit bans, rights group Safeguard Defenders says in a new report.

A Reuters analysis has found an apparent surge of court cases involving such bans in recent years, and foreign business lobbies are voicing concern about the trend.

The European Union trade chief said on Monday the bloc had no intention of cutting ties with China even as it takes steps to lower economic dependencies and “de-risk”, but China “could do a lot” to help reduce the perception of risk.

Wang, who joined Nomura in 2018 after having worked at Deutsche Bank and Chinese brokerage Zhong De Securities, besides ICBC, recently attended work events on the mainland, the second source added.

In August last year, he was also appointed as chairman of Nomura Orient International Securities, the bank’s majority-owned securities business headquartered in the commercial hub of Shanghai.

(Reporting by Selena Li and Kane Wu in Hong Kong; Additional reporting by Makiko Yamazaki in Tokyo and Liz Lee in Beijing; Editing by Sumeet Chatterjee and Clarence Fernandez)

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    Alex Harsha
    Alex Harsha

    Alex Harsha is a full-time writer.Before becoming a full-time writer, Alex was a public school teacher. He teaches writing workshops to children and adults. Lives in Connecticut & Works on next novel.

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