China's top hedge fund manager Xu Xiang, known as the country's Warren Buffett, has been arrested in dramatic fashion for alleged insider trading offences that led to stock market crash in June, wiping out trillions of dollars.
Xu's arrest is the latest in a string of cases targeting traders involved in the summer meltdown in Chinese stocks.
A squad of Chinese highway patrol cars on Sunday sealed off the Hangzhou Bridge in eastern China for more than 30 minutes while officers surrounded Xu's car, eventually leading the Armani-clad billionaire off in handcuffs.
Simultaneously, police moved in on Xu's company offices in Shanghai and Beijing, confiscating documents and computers as well as interviewing employees, Hong Kong-based South China Morning Post reported today.
Police and regulators have had their eyes on Xu Xiang, general manager of Zexi Investment and regarded by many as China's No 1 hedge fund manager, ever since the losses caused by the chaos in China's stock markets this summer climbed into trillions of dollars.
Over USD 3.2 trillion losses were reported resulting over 20 million small investors deserting China's stock market.
Xu and several other executives of Zexi were arrested on charges including insider trading and stock market manipulation, the Post quoted official media as reporting.
Many had thought Xu was in the clear after an earlier interrogation by regulators over suspicious trades following the boom-to-bust cycle in the A-share market in mid-June.
The detention of Xu, whose aura in China is akin to that of Warren Buffett in the West, is the latest crack to appear in the country's securities industry, the Post report said.
"It was widely believed that he was safe after being interrogated," the fund manager said.
"He understands the rules better than any other fund manager and it should have been difficult for police to spot his illegal behaviour."
Zexi's hedge funds recorded at least 140 per cent growth in net asset value this year, making the company controlled by Xu the standout performer in the mainland's securities industry.
He was viewed as the best of the best before the investigation into him was announced," said Zhou Ling, a hedge fund manager at Shanghai Shiva Investment.
"His detention shows there is no God in this market at all. It was the inside information and conspiracy that helped him to make a killing," Zhou was quoted by the Post as saying.
The benchmark indicator jumped nearly 120 per cent between October 2014 and mid-June 2015 before slumping more than 32 per cent in three weeks.
