Man Group's China chair in talks with authorities over shares turmoil

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The chair of Man Group’s business in China is said to have been called to a meeting between foreign financial firms and market authorities as Beijing puts pressure on prominent figures in the financial industry over recent heavy falls in share prices.

After Bloomberg News reported that Li Yifei, who runs the UK hedge fund group’s Chinese operation, had been taken into custody to help with a police investigation into market volatility, Li’s husband, Wang Chaoyong, told the Financial Times (paywall) the Bloomberg article was not accurate.

“Li is in a meeting with [financial industry] authorities at the moment in the suburbs of Beijing,” Wang told the FT. He said the meeting was continuing from Monday and “it sounds like there are a lot of people attending from foreign financial institutions”.

Wang said he did not know what the meeting was about and that because it was confidential those attending had to keep their mobile phones turned off.

The Bloomberg report, which cited a person familiar with the matter, added that Li’s assistance did not imply she had done anything wrong or would face charges.

A spokesman for Man Group in London declined to comment. The company’s shares fell almost 5% to 153p in late-morning trading, making it the third-worst performer in the FTSE 250 index, although less than 1% of Man’s £51bn of assets are in China.

Li is one of the most recognisable members of the Chinese financial sector, even though Man does not have a licence to trade shares in China. Her role is to attract business from Chinese investors for the group’s funds that invest around the world.

Xinhua, the state news agency, said on Monday a total of 197 people had been caught up in an investigation into the spreading of rumours about the stock market.

Wang Xiaolu, a journalist for the Caijing business magazine, read out a confession on television admitting to spreading false information while reporting on the stock market. “I shouldn’t have sought to make a big splash just for the sake of sensationalism,” he said.

Reuters said it had not been possible to verify whether the journalist made his confession freely.

Chinese shares have fallen about 40% since mid-June, rocked by concerns about a slowdown in its once booming economy and a surprise currency devaluation last month. On Tuesday the Shanghai composite lost 1.3%.

The authorities in China have repeatedly blamed market manipulators and foreign forces for the turmoil. In July, the ministry of public security said it would help the China securities regulatory commission investigate evidence of “malicious” short selling of stocks and indexes. Short sellers bet that prices will fall by borrowing securities and selling them in the hope they will be able to buy them back more cheaply.

The clampdown on supposed market manipulators has set nerves rattling among investors about how China responds when markets do not act as Beijing would like.

Michael Hewson, market analyst at the CMC Markets, the spreadbetting company, said the hardline approach seemed to be for domestic consumption. Outside investors would continue to have fears about the fundamentals of the Chinese economy and markets, he said.

“While these measures may suit the narrative of the Chinese government in helping mask some of the problems in the Chinese economy they do nothing for investor confidence, and in particular in improving investment confidence within China itself.”

Li was previously a managing director at the Chinese arm of the hedge fund GLG Partners, according to a biography posted on the website of the Rockefeller Foundation, where she is a trustee. Man Group bought GLG in 2010.

Before working at GLG, Li was managing director of MTV Networks in China, and also worked as chief representative at the Chinese business of the US media company Viacom, which owns MTV.

In May 2001, when she was 37 and worked for Viacom, Fortune magazine named Li as one of 25 rising global business leaders for the next generation. She was also a national champion in Chinese martial arts, according to her Rockefeller Foundation biography.

Powered by Guardian.co.ukThis article was written by Sean Farrell, for theguardian.com on Tuesday 1st September 2015 16.45 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010

 

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