Shares in China Minsheng Banking Corp fell sharply on Monday after its former president Mao Xiaofeng was taken away for investigation on Friday by the Central Commission for Discipline Inspection.

The corporation is China's first lender started by private investors.

Mao, 42, is suspected to have been involved in a major corruption scandal surrounding Ling Jihua, former State official, Caixin Media reported in Beijing on Saturday.

At one point, Minsheng shares slid by as much as 6.6 percent in Shanghai and by 10.5 percent in Hong Kong.

But these declines were later pared to 3.2 percent and 3.1 percent by the close of trading. Established in 1996, Minsheng had total assets of 3.77 trillion yuan ($602 billion) as of Sept 30.

Investors fear the investigation of Mao may see the involvement of more individuals, most importantly several children of former top leaders.

Soon after the investigation was reported, Minsheng said in a statement to the Shanghai Stock Exchange on Saturday that its board of directors had accepted Mao's resignation and had appointed chairman Hong Qi as acting president.

At a meeting with analysts from securities companies and investment institutions on Sunday, Hong said Mao had resigned for personal reasons.

According to minutes from the meeting, the bank will re-elect its board members in April or May and decide on the appointment of top executives before this.

Meanwhile, Beijing-based Anbang Insurance Group Co has increased its shareholdings in Minsheng 10 times since the end of November to become the largest shareholder.

Anbang has recently been involved in an ambitious expansion program, including its takeover of the Waldorf Astoria Hotel in New York City and Fidea, a Belgian insurance company.

As of Jan 31, Anbang owned about 6.13 billion Minsheng A-shares and 716 million Minsheng H-shares, controlling more than 20 percent of the bank's equity, according to disclosure filings to the Hong Kong Stock Exchange.

Some board members and founding investors have reduced their holdings in Minsheng.

Guo Guangchang, chairman of Fosun Group, China's largest non-State-owned conglomerate, disposed of his entire 0.13 percent stake in Minsheng's A-shares.

Liu Yonghao, chairman of New Hope Group Co Ltd, one of the country's leading agricultural and animal husbandry companies, reduced his stake in Minsheng from 8.38 percent to 7.69 percent on Dec 26.

Mu Hua, an analyst at GF Securities Co in Guangzhou, Guangdong province, said Anbang will continue to increase its stake in Minsheng following the fall in the lender's share price.