GF Securities Hong Kong Chief Tang Xiaodong Resigns From Firm

https://www.bloomberg.com/news/articles/2019-04-15/gf-securities-hong-kong-chief-tang-xiaodong-resigns-from-firm

GF Securities Co. said Monday the head of its Hong Kong unit has resigned from the firm, after losses rocked one of its hedge funds.

Tang Xiaodong, who joined in May, stepped down for personal reasons, GF Securities said in the Monday statement. The unit he ran, GF Holdings (Hong Kong) Corp., had set up a hedge fund that lost more than $100 million last year, primarily on foreign exchange trades, leaving it with negative capital.

The GTEC Pandion Multi-Strategy Fund SP lost $139 million in 2018, and faced margin calls from Citigroup Inc., its prime broker, according to a statement last month and people with knowledge of the matter. The performance stemmed mainly from trades in the Turkish lira, which whipsawed investors in August amid mounting political tensions with the U.S., one of the people said. The Pandion loss contributed to a 50 percent drop in GF Securities’s full-year profit.

Read more: Hedge fund blowup that rocked Citi began with bad lira bets

Monday’s statement didn’t mention the hedge fund or its losses. Tang was previously a deputy director at the China Securities Regulatory Commission.

GF Securities, one of China’s largest brokerages, faces increased regulatory scrutiny as a result of the incident. The Guangdong branch of the nation’s securities regulator has asked the company to improve risk management and bolster investment in compliance, as well as to submit a written report on who should be held responsible.

— With assistance by Evelyn Yu

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