SHANGHAI/HONG KONG (Reuters) - China Huarong Asset Management Co (2799.HK) confirmed its chairman Lai Xiaomin, who is under investigation for alleged corruption, had stepped down, sparking an 11 percent tumble in shares of the nation’s biggest bad debt manager on Friday.

FILE PHOTO - China Huarong Asset Management Co Chairman Lai Xiaomin listens to a question from a reporter during the debut of the company at the Hong Kong Exchanges in Hong Kong, China October 30, 2015. REUTERS/Bobby Yip/File Photo

Reuters reported earlier this week, citing sources, that a senior banking regulator official would take the helm at state-owned Huarong after China’s anti-corruption watchdog launched a probe into Lai for “serious discipline violations”, a euphemism for graft.

Huarong said in a statement to the Hong Kong stock exchange late on Thursday that Lai’s departure “will not cause any adverse impact to the business.”

FILE PHOTO - Logos of China Huarong Asset Management Co are seen during a finance expo in Beijing, China October 30, 2014. China Daily via REUTERS/File Photo

Wang Zhanfeng, head of the Guangdong branch of China’s banking regulator, had been lined up as its new chairman and Li Xin, chief supervisor of China Orient Asset Management Co Ltd, would be named president of Huarong, it said.

Investors sold down the stock sharply when trading resumed on Friday after being halted earlier this week. The Hong Kong-listed shares fell 11 percent, their biggest one-day drop, to hit their lowest level since January last year in a slightly softer wider market .HSI.

“People are holding back on companies haunted by similar issues involving management, worried that they might face some other hurdles even after a management reshuffle,” said Steven Leung, a sales director at UOB Kay Hian. He added

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