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CICC Chief Steps Down; IPO Delayed

10/14/2014 | 06:56am US/Eastern

HONG KONG-- Levin Zhu, son of former Chinese Premier Zhu Rongji, has resigned as chief executive of investment bank China International Capital Corp. after nearly 17 years at the helm, as its planned initial public offering has been delayed.

CICC said Tuesday that it had appointed Chief Operating Officer Shoukang Lin, who joined CICC in 2000, as acting chief executive. Mr. Zhu's plans weren't clear and he couldn't immediately be reached for comment.

The investment bank had planned to raise around US$500 million in a Hong Kong IPO before the end of this year, but the offering has been delayed and it remains unclear when it might happen, people familiar with the situation said. A CICC spokeswoman said the bank would conduct a global search for Mr. Zhu's successor.

CICC was formed by Morgan Stanley and China Construction Bank Corp. as China's first Sino-foreign joint-venture investment bank in 1995. Morgan Stanley sold its stake in December 2010 to a consortium that included sovereign-wealth fund Government of Singapore Investment Corp., Great Eastern Holdings Ltd., the insurer controlled by Oversea-Chinese Banking Corp., and private-equity firms KKR & Co. and TPG Capital.

Under Mr. Zhu's leadership, CICC had expanded beyond investment banking and underwriting to equities trading and asset management.

Last year it posted a net profit of 370.1 million yuan (US$60.4 million), up from 307.7 million yuan in 2012 but a decline from 909.2 million yuan in 2010.

With close ties to Chinese state-owned enterprises, CICC for years ranked as China's top bank for IPOs until the mid-2000s, competing successfully against Wall Street banks and other Chinese underwriters for mega-listings in Hong Kong.

In recent years, though, it has lost IPO deals to competitors such as Citic Securities and Haitong Securities Co. as the IPO market shifted from state enterprises to high-growth private companies such as Alibaba, which held a record US$25 billion IPO in New York in August.

In fact, the last time CICC ranked as the top underwriter of Hong Kong IPOs was in 2005, according to data provider Dealogic. It ranked third last year and currently ranks seventh this year. Hong Kong is Asia Pacific's top venue for IPOs.

China's 14-month closure of its domestic IPO market, which ended early this year, hurt many local investment banks, including CICC.

CICC's landmark deals all involved state-owned enterprises. They included the US$22.1 billion Shanghai-Hong Kong dual listing in 2010 by Chinese lender Agricultural Bank of China Ltd., still the world's second-largest IPO, which was split with six other banks; a US$21.9 billion Shanghai-Hong Kong dual listing by Industrial & Commercial Bank of China, the country's largest bank by assets, in 2006; and a US$5.6 billion Hong Kong-New York dual listing by telecommunications services provider China Unicom Ltd. in 2000.

Central Huijin Investment Ltd., the domestic investment arm of China's sovereign-wealth fund, is the largest shareholder in CICC with a 43.35% stake. Singapore's GIC holds 16.35%, according to CICC's annual report. TPG Capital owns 10.3% and KKR holds 10%.

CICC ranked 23rd by total assets among China's securities companies in 2013.

Amy Li contributed to this article.

Write to Prudence Ho at prudence.ho@wsj.com

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