Will the real Goldman Sachs please stand up? In a bizarre extension of the trade in fake products in China, Bloomberg has unearthed a fake Goldman Sachs operating out of Shenzhen.
This is no, ‘I meant to say Gladman Socks, but I had a fat finger moment’ scenario, nor is it a leftfield route into an investment bank in China if you’re not a princeling. Even its Chinese name – Gao Sheng – has the same characters as the U.S. bank. It’s been running for two years in a part of China that’s home to some huge mutual funds as well as China Merchants Bank and Ping An Insurance Group, so not exactly a financial services backwater, and only came to light because the U.S. sent a letter to China’s top official in charge of the anti-corruption campaign, asking him to look into this company because they suspect this “Goldman Sachs” is involved in money laundering tied to the gambling industry.
What’s going on? Was this firm allowed to exist because everyone turned a blind eye, or does Goldman Sachs have an image problem in China? Maybe it needs to increase brand awareness – global banks are struggling to get a foothold in the Chinese investment banking space currently and Goldman is no exception.
China has its own ‘Goldman Sachs’ in CITIC Securities, which dominates local and global players alike when it comes to getting a plum seat on investment banking deals in the country. However, its expansive ambitions have been dented this week. Not only has the stock market plunge in China forced it to shelve some plans to list some of its business units, but it’s in the midst of a scandal.
Altogether eight senior managers, including three from the executive committee, were taken by police to assist investigations into possible unlawful market activities. Its reputation and image are likely to take a hit, at least for now, whatever the outcome of the investigation may be.
Perhaps there’s a new opportunity in China for the real Goldman Sachs after all.