Chinese authorities tracked down and detained a top fund manager in an alleged stock manipulation case Sunday, according to state-owned Xinhua news agency, the Associated Press reported. Xu Xiang, manager of Zexi Investment, one of China's largest private funds, was suspected of illegally obtaining sensitive information about the stock market and manipulating prices, according to the report.
The high profile investor has reportedly been transferred to Beijing and police have taken over the offices of Zexi in Shanghai and Beijing. The 37-year-old Xu is well known for the runaway success of his investments in Chinese stocks, after he dropped out of school to start dabbling in stocks with a small loan from his parents, according to CNBC. Some of Zexi’s investments this year have given returns of around 250 percent, the report added.
Since the news of the arrest, five of the stocks Zexi has invested in tumbled by their daily limit at market open Monday.
As the Chinese stock market recovers from its summer meltdown, authorities have intensified their investigations into market manipulation -- the search has so far led to the arrests of journalists, senior brokerage executives and even securities regulators, according to the South China Morning Post.
In a separate incident, two executives from a Hong Kong-owned fund were also arrested Sunday on charges of using software to manipulate Chinese futures markets.
Gao Yan, general manager at Yishidun International Trade Co., and senior executive, Liang Ze, were arrested for allegedly using computerized trading software to make illegal gains of more than 2 billion Yuan ($317 million), the South China Morning Post said.
China-registered Yishidun was set up in 2012 by two foreign nationals, Georgy Zarya and Anton Murashov, who currently remain at large. The Ministry of Public Security said that it planned to enlist foreign authorities to net the overseas suspects.