Business / Markets

Police freeze assets held by mother of Xu Xiang

(Agencies) Updated: 2015-11-11 10:16

Chinese police slapped a two-year freeze on more than $670 million of shares owned by the mother of Xu Xiang, the Shanghai hedge fund boss under investigation for alleged insider trading and stock manipulation.

Two companies, one in Beijing and one in Nantong in Jiangsu province, reported the freeze on stakes held by Xu's mother, Zheng Suzhen, in statements to the Shanghai Stock Exchange on Monday night. Zheng has not been named by authorities as being under investigation.

Xu, one of China's highest-profile and top-performing money managers, is among the targets of a Chinese government crackdown that spans executives at brokerage CITIC Securities Co Ltd and officials at the China Securities Regulatory Commission after a $5 trillion summer stock market rout.

The police detained Xu, who is known in China as "hedge fund brother No 1", on the highway between Shanghai and Ningbo on Nov 1, China National Radio reported. Xu, general manager of Zexi Investment, did not answer a call to his mobile phone on Tuesday and calls to Zexi's Shanghai and Beijing offices were not answered.

His mother Zheng's 275 million shares in retail firm Wenfeng Great World Chain Development Corp in Nantong were worth 2.16 billion yuan ($340 million) at Monday's closing price. The company's stock jumped by the maximum 10 percent on Tuesday.

At technology firm Daheng New Epoch Technology Inc in Beijing, Zheng is the biggest shareholder with 129.96 million shares valued at 2.14 billion yuan on Monday. That firm's stock also rose by as much as 10 percent on Tuesday.

Cheng Min, Wenfeng's securities affairs representative, said the company did not have any contact information for Zheng. At Daheng, two officials-the board secretary and the securities affairs representative-did not answer phone calls.

Xu's Zexi managed four of China's top-10 performing hedge funds between June and August, according to Shenzhen Rongzhi Investment Consultant Co. The average return of Zexi's five stock funds has ranked among China's top three each year since the firm was founded five years ago, according to the Economic Daily's website.

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