China limits stock account of US hedge fund giant Citadel: Xinhua

SHANGHAI (AFP) - China's securities regulator has restricted a stock trading account of one of the world's biggest hedge funds, US-based Citadel, in the wake of a market rout, the official Xinhua news agency reported.

The China Securities Regulatory Commission (CSRC) said on Friday that the Shanghai and Shenzhen exchanges had imposed limits on 24 unidentified accounts on "suspicion of influencing securities trading prices or other investors' investment decisions".

It blamed them for heightened volatility on the exchanges, which have seen wild swings in recent weeks as Shanghai plummeted 30 percent before the government intervened with a rescue package.

Based on individual statements by the two exchanges, the number of limited accounts had risen to at least 34 - 14 in Shanghai and 20 in Shenzhen - by Monday.

State media said that some were suspected of placing buy or sell orders to influence prices, then not executing the trades.

The CSRC did not detail the limits, but under China's securities laws they can include being barred from buying and selling.

Xinhua said late Sunday that one of the accounts was owned by Citadel, but cited state-owned CITIC Securities as denying it was involved.

CITIC Securities has also denied accusations of short-selling - essentially a bet that prices will go lower.

The Wall Street Journal quoted Citadel as saying that trading in one of the accounts it manages in China had been "suspended".

"We continue to otherwise operate normally from our offices, and we continue to comply with all local laws and regulations," the newspaper quoted a Citadel spokesman as saying.

Citadel could not immediately be reached for comment. The company, founded in 1990 and based in Chicago, had more than US$25 billion (S$34.37 billion) in investment capital as of March.