Reportedly, Morgan Stanley, which paid just $37m for 34.3% stake when CICC was founded in 1995, has been trying to sell the $1bn stake in CICC over the last two years. In 2009 too Morgan Stanley tried to sell it, but the auction failed.
While the stake in the CICC has been profitable for Morgan Stanley, the New York-based lender lacks control over management decisions in the Chinese investment bank.
Earlier, in an attempt to get a joint venture status so that it can excercise more control over management, in late 2007, Morgan Stanley signed an agreement with China Fortune Securities. However, as China bars foreign firms from entering into more than one joint venture and limits their holdings to a third of the total, the deal hit a gridlock due to its failure to sell the CICC stake.
Headed by Levin Zhu, son of former Chinese premier Zhu Rongji, CICC offers offers fund managers and corporate clients corporate restructuring and mergers and acquisitions advisory, securities and brokerage, underwriting, asset management, sponsoring and fund management, and inter-bank lending and borrowing services.
