Wang Dongming, the well-connected star chairman of Citic Securities, is to step down next year with the company still enmeshed in a series of investigations following a government crackdown on the financial industry.
In a statement on Tuesday, China’s largest brokerage by assets said Wang, 64, will not stand for the next round of board member elections. It cited age as a factor and said Zhang Youjun, 50, a potential successor, was nominated to the board.
People with knowledge of the matter told FinanceAsia that Wang has already been replaced as Citic Securities’s party chief, the firm's top Communist Party official, by Chang Zhenming, the chairman of Citic Securities's parent company and largest shareholder, Citic Group. Zhang is now also deputy party secretary, the two sources added.
“It shows Citic Group’s support to Citic Securities. We will start the next board election as soon as possible,” a press officer at Citic Securities told FinanceAsia, adding that the election is expected to take place next March at the earliest.
In the press release, Wang spoke of the "gruelling challenges” now facing the company but added that the broker has previously ridden out “many storms” and will “eventually strengthen its foundation and move forward.”
Set up in 1995 Citic Securities, the full-service investment banking unit of Chinese conglomerate Citic Group, has quickly developed into China’s most internationalised and biggest brokerage by assets. Occasionally dubbed the "Goldman Sachs of China" it is also a market leader in brokerage services, investment banking, and asset management.
(Very) well-connected
A veteran financier, Wang joined the Beijing-headquartered brokerage firm at its foundation in 1995 as vice general manager. He became chairman in 2002, a year before Citic Securities was listed in Shanghai.
Originally majoring in French at college in the 1970s, Wang is also a fluent English speaker and obtained a Master’s degree in international finance from Georgetown University in 1984.
Wang comes from a privileged background. He is the son of China’s former vice foreign minister Wang Bingnan, who was at one time Chairman Mao Zedong’s secretary and served as China’s chief representative during a series of Sino-US ambassadorial talks in the 1950s.
His younger brother Wang Boming, who helped set up the Shanghai and Shenzhen stock exchanges in the 1980s, now leads a media company that runs the respected business magazine Caijing.
Wang is also a childhood friend of President Xi Jinping although it is unclear how close they are now.
Sources familiar with the broker said Wang has deep connections in China’s financial sector and enjoyed considerable autonomy.
Under his almost 20-year leadership, Citic Securities has positioned itself as the go-to financial institution for both Chinese companies and foreign investors and is actively expanding beyond mainland China, acquiring pan-Asian broker CLSA in 2013.
“He is quite aggressive and ambitious but he definitely has the long-term vision,” one Beijing-based fund manager at Citic Securities told FinanceAsia. “Otherwise, Citic Securities wouldn’t have today’s achievement and market position.”
According to investment bankers and fund managers at Citic Securities contacted by FinanceAsia, that vision in recent years has involved following the Goldman Sachs model. Wang was impressed by the Charles Ellis bestseller “The Partnership: The Making of Goldman Sachs” and called for a Chinese translation, they said.
“Many new comers are asked to read the book when they join the company,” one Beijing-based investment banker at Citic Securities told FinanceAsia. “Wang highly recommended it. That’s also why it is displayed in the most central place at the bookstore in the company’s lobby.”
Zhang, the only chairman candidate named so far, served as the general manager of Citic Securities from 2002 to 2005. He more recently held roles at Citic Group as director of the board office and assistant to the general manager.
