'Goldman Sachs of China' finds itself in Beijing's cross hairs

Hong Kong

WITH its market dominance, banking talent, global ambition and sterling political connections, Citic Securities fancied itself the Goldman Sachs of China.

Citic Securities, the brokerage arm of the biggest state-owned financial conglomerate, rode China's stock market boom and a surge in corporate borrowing. The company's stock price tripled in six months.

Now, Citic Securities is in the cross hairs, as Beijing looks into how the government's aggressive intervention failed to stem a wrenching market fall that wiped out nearly US$5 trillion in stock gains.

Last Tuesday, the company said that three of its executives, including its president, Cheng Boming, were being investigated on suspicion of insider trading. That followed the announcement in August that eight company employees, inc…