(Yicai Global) July 20 -- Tong Jianping, former deputy secretary of the Shanghai Discipline Inspection Committee of the Communist Party of China, has been appointed to chair the supervisory board of Haitong Securities, according to an authoritative source.

The position had been vacant since the last incumbent, Shou Weiguang, left office in 2017, according to public information. His replacement reported to Haitong Securities at 9 a.m. today, the source told Yicai Global.

Born in Taizhou city, Zhejiang province in 1962, Tong became deputy secretary of the Shanghai Discipline Inspection Committee and deputy director of the Shanghai Supervisory Committee in January 2018.

Haitong Securities was once one of China’s leading brokerages. But in the past two years, regulators have punished Haitong Asset Management, a subsidiary, for a series of risk events. Against this backdrop, the new head of its supervisory board is expected to better manage corporate governance and risk compliance.

In January last year, Haitong Asset was warned by the National Association of Financial Market Institutional Investors after it was suspected of helping Yongcheng Coal & Electricity Group issue bonds illegally and manipulate the market. It was also urged to make deep changes.

Subsequently, Shanghai-based Haitong Securities was downgraded to a BBB rating in 2021 from AA. Zhang Shijun, deputy general manager of Haitong Asset, and Li Xue, chief risk compliance director, also resigned last year.

In March of the same year, due to the failure of Haitong Securities and Haitong Asset to operate their investment consulting and private equity business prudently, among other issues, the China Securities Regulatory Commission suspended Haitong Securities from providing bond-related advisory services to institutional investors for 12 months.

The CSRC also halted Haitong Asset from providing securities and futures operators with investment advisory services for 12 months, and suspended it from registering new private placements and asset management products for six months.

On June 22, the Shanghai branch of the CSRC published an administrative penalty decision against Liu Mou, deputy director of the asset management and investment department of Haitong Securities, for illegally speculating in stocks. According to the decision, Liu was fined and had CNY109 million (USD16 million) confiscated for illegal stock speculation.

Editor: Peter Thomas