China regulator probing private funds over disclosure

SHANGHAI (Reuters) – Chinese private funds including Hangzhou Yuyao and Shenzhen Huisheng are being investigated over suspected false information disclosure, the China Securities Regulatory Commission (CSRC) said on Friday.

The CSRC said investment risks had been flagged by fund managers such as Chinasoft New Momentum.

According to its preliminary judgment, personnel controlling private funds including Hangzhou Yuyao and Shenzhen Huisheng reported false information and may also be suspected of criminal behaviour.

Reuters was unable to reach representatives of Hangzhou Yuyao or Shenzhen Huisheng for immediate comment.

Public securities authorities were also involved, the regulator said.

Chinasoft New Momentum Asset Management Co Ltd, a Beijing-based fund of funds manager with 16 billion yuan ($2.22 billion) assets under management, said last week some of its fund products had repayment difficulties, as the products, which invested in private fund Shenzhen Huisheng, had defaulted.

($1 = 7.2111 Chinese yuan renminbi)

(Reporting by Shanghai Newsroom; editing by David Goodman and Jason Neely)