Top fund manager nabbed in probe
Print Edition
Police have arrested Xu Xiang, one of China’s top performing private fund managers, for suspected stock market fixing — the latest crackdown on market malpractices following this summer’s stock market rout.
Xu, legal representative and general manager of Shanghai-based company Zexi Investment, was suspected of illegally obtaining inside information to trade stocks and manipulating share prices, the Ministry of Public Security said in a statement through the Xinhua news agency late on Sunday.
Shanghai police have reportedly raided Zexi’s office in the BEA Finance Tower in Pudong’s Lujiazui financial district.
The news of Xu’s arrest has sent several stocks invested by Zexi to drop by the daily 10 percent limit when markets opened yesterday. Shenzhen-listed Shanghai Metersbonwe Fashion and Accessories Co ended 7.4 percent down at 6.15 yuan (97 US cents) while Tianjin Saixiang Technology Co fell by the 10 percent daily limit to 10.14 yuan.
Xu, from Ningbo in Zhejiang Province, started from scratch and became rich by investing in the secondary market. Xu, 39, set up Zexi in 2009 with a registered capital of 30 million yuan. Zexi has since grown into one of China’s top private equity firms.
Xu’s reputation as a top performing fund manager soared when funds managed by him yielded market-beating returns. Despite the market meltdown in July and August, some of Zexi’s funds have posted returns of over 300 percent.
Xu’s arrest came after Shanghai police nabbed three suspects of Yishidun in a crackdown on stock futures price manipulation involving over 11.3 billion yuan in illegal profits.
Yishidun, registered in Jiangsu Province’s Zhangjiagang City in 2012, was found to use an illegal stock futures trading software to destabilize the market and profit from volatility.
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