Financial company “Huaxing Capital Holdings” founder and chairman, Bao Fan, has been taken away for investigation for two years, and more details of his case have emerged. It is reported that Bao Fan’s case is closely related to the “revolving door” case of the executive Lin who was poached from Industrial and Commercial Bank of China. Currently, they are both being detained in Beijing. If eventually found guilty of bribery, Bao Fan may face at least several years of imprisonment.
Bao Fan has been missing since February 2023 and was subsequently taken away for investigation by relevant authorities.
According to a report by Caixin on February 6, 2025, several sources familiar with Bao Fan’s case revealed that he is suspected of bribery and bribery of non-state personnel. The case has now entered the judicial process and been transferred to the procuratorate for review and prosecution. Bao Fan’s case is closely connected with Lin, a former mid-level manager at Industrial and Commercial Bank of China. The most controversial issue is a substantial sign-on bonus Lin received when he moved to Huaxing. If the court eventually determines that it constitutes bribery, Bao Fan may face at least several years of imprisonment.
Lin was a high-ranking executive poached by Huaxing from ICBC International. ICBC International is a wholly-owned subsidiary of Industrial and Commercial Bank of China.
In July 2022, Lin, who was then the CEO of Huaxing Capital and chairman of Huaxing Securities (Hong Kong), was suddenly investigated, and his duties were taken over by Bao Fan. Both Lin and his spouse Yang Chunlei were taken away for questioning. Yang Chunlei, the former deputy director of the Party Committee Inspection Office of the China Securities Regulatory Commission, was expelled from the Party in November 2023. The details of Lin’s case have not been publicly disclosed yet.
Currently, both Lin and Bao Fan are detained in Beijing.
Lin worked in ICBC for 30 years, joining in 1990 and serving in various positions at the head office in credit, business, and international business departments. He worked at ICBC Leasing for 7 years and eventually became the first CEO. When Lin was in charge of ICBC International, he had extensive cooperation with Huaxing. ICBC International also recommended Huaxing Capital for its Hong Kong Stock Exchange IPO in 2018, bringing Lin and Bao closer. Lin was invited to join Huaxing in 2020.
When Huaxing poached Lin, it offered him around 20 million yuan as a sign-on bonus, along with a lucrative annual salary and a certain percentage of dry shares as equity incentives. The 20 million yuan sign-on bonus was deemed as a bribe by the investigating authorities.
A source close to Bao Fan stated that Lin was a bureau-level official at ICBC, and it is difficult to determine whether the 20 million yuan was paid for his status or professional ability.
However, according to a foreign investment bank professional, state-owned major banks are unlikely to offer such high bonuses on top of legitimate income. A financial institutions professional from a Chinese firm mentioned that there is no standard pricing for sign-on bonuses; generally, foreign investment banks offer more, and Chinese private institutions sometimes offer extravagantly, yet giving out 20 million yuan is considered rare.
Lin was taken away by relevant authorities in early September 2022.
The report mentioned that Lin’s case was related to a corruption case in the financial leasing industry that was tied to projects under the Belt and Road Initiative. After being investigated, Lin’s case underwent twists and turns, with rumors of him retracting statements and sudden illness, creating a complex situation that also delayed Bao Fan’s case.
Lin’s investigation violated the taboo of the official crackdown on the “revolving door” in recent years. The term “revolving door” refers to the practice where regulatory departments or state-owned enterprises open convenient doors for market institutions, allowing civil servants to receive high salaries after leaving for market institutions, which raises suspicions of improper interest transmission and undergoes strict scrutiny.
There have been several recent cases, such as Feng Henian, a bureau-level executive of the China Securities Regulatory Commission, who became a typical figure in the political-business revolving door after entering the private sector for 7 years; former Bank of China construction member Zhang Long was accused of arranging benefits for a private enterprise from the Bank of China where he used to work after leaving for 7 years; Huang Xi from Bank of China Shenzhen Branch joined the private real estate company Taihe Group and was investigated in May 2022, two years after Taihe’s bankruptcy; and Tang Wentao, a former deputy general manager at the asset management center of Bank of China, was investigated after joining the private Fujian-based real estate developer Forte Group.
Initially, Bao Fan was only involved in the investigation due to cooperation with Lin, but as the investigation deepened, Bao Fan became a standalone case.
Bao Fan, born in Shanghai in 1970, studied abroad in the 1990s and worked on Wall Street in the United States after graduating. After 7 years of working overseas, Bao Fan returned to China and joined the AsiaInfo Group as Chief Strategic Officer, resigning five years later. In 2005, he founded Huaxing Capital in Beijing.
Following Bao Fan’s investigation, a series of chain reactions were triggered. In April 2023, due to inability to reach Bao Fan, the then-auditor of Huaxing Capital, Deloitte, refused to sign the annual report, leading to a long-term trading halt for Huaxing Capital. It wasn’t until September 2024 that Bao Fan’s wife, Xu Yanqing, took over as a non-executive director of Huaxing Capital, and the stock was officially relisted.
Multiple sources close to Huaxing Capital and the investment circle revealed that Huaxing Capital is considering a complete sale, currently in the quoting stage.
According to reports, a source close to Huaxing Capital mentioned that Bao Fan had already wanted to divest from Huaxing before the incident, but was uncertain whether to sell the group or the mainland brokerage license.
After Xu Yanqing took over, she began seeking buyers for Huaxing Capital. “Huaxing’s FA business used to rely on Bao Fan’s connections, which are no longer valuable. What is valuable now is its Mainland brokerage license,” stated a financial professional in Hong Kong.
Another individual monitoring Huaxing Capital mentioned that since Xu Yanqing took over, she has been actively engaging with foreign buyers in hopes of selling Huaxing Capital’s equity. By January 2025, it had entered the quoting phase, but due to the critical stage of Bao Fan’s case, discussions were temporarily suspended with hopes of a clearer outcome.
Regarding the information on Bao Fan’s case, attempts were made to contact his family and legal representatives, but no response was received by the time of publication.