HONG KONG • He has been called China's Carl Icahn. But the billionaire owner of one of the country's most successful investment firms is now the latest suspect in a broadening crackdown on corruption in the financial industry.
The fund manager, Xu Xiang, nicknamed Big Xu, was apprehended in dramatic Hollywood fashion, worthy of a spy movie.
As the police closed in, the highway patrol sealed off the 35.4km Hangzhou Bay Bridge for more than 30 minutes and eventually apprehended Xu near the exit late on Sunday morning, reported state media.
The government offered scant details on the arrest. "Xu Xiang and others are suspected of insider trading and other offences and are in criminal detention," said a brief statement on the official Xinhua news agency.
The Chinese government has been extending its anti-corruption probe, moving more aggressively into the financial industry. Mr Wang Qishan, the Communist Party official in charge of the crackdown on graft, announced last month that his Central Commission for Discipline Inspection would begin inquiries into the financial companies.
The corruption crackdown has been a cornerstone of the tenure of President Xi Jinping. Since Mr Xi rose to power in 2013, the Chinese government has arrested more than 100,000 officials, executives and others in a far-flung investigation that has touched many big industries, including oil companies, car manufacturers and electric utilities.
Scrutiny of the financial companies has been amplified by the stock market turmoil in recent months. After riding a boom for over a year, the industry is now at the centre of the storm, as Beijing looks into what went wrong.
An official at the main stock market overseer confessed in late August to insider trading, forgery and accepting bribes. An assistant chairman at the agency, the China Securities Regulatory Commission, is under investigation.
The authorities are also looking into a number of executives at Citic Securities, the brokerage arm of the biggest state-owned financial conglomerate, including its president Cheng Boming. The investigation centres on insider trading.
In recent years, Xu was at the top of the financial game. His funds at Zexi Investment, based in Shanghai, outperformed almost every other investment vehicle in China. His record of taking minority stakes in companies and pushing for shareholder rights, like higher dividends, earned him comparisons with Mr Icahn in China's financial press.
Xu and his relatives have a combined fortune of US$2.2 billion (S$3.1 billion), according to the Shanghai-based Hurun Report.
As the rest of the market stumbled this year, Xu seemed to defy the slump. Although the Shanghai Composite Index has risen less than 3 per cent so far this year, the Zexi No. 1 Fund, which works with a subsidiary of the state-owned conglomerate China Resources, gained 323 per cent as of last Friday; it has risen 3,270 per cent since its inception in 2010. The Zexi No. 3 Fund has gained 382 per cent this year and 3,945 per cent since 2010, according to figures on the firm's website, which were obtained before it was taken down on Monday morning.
The firm's performance was the subject of intense market speculation in September, when a post on social media accused it of manipulation. At the time, Zexi said the accusations were "fabrications from nowhere and malicious attacks".
Separately, a former senior Communist official and ally of former security chief Zhou Yongkang was sentenced to 12 years in prison for corruption yesterday, the Nanchang People's Intermediate Court said on a verified social media account.
Li Chongxi, who headed a political advisory body in Sichuan, was convicted of taking bribes of about 11 million yuan (S$2.4 million). Li is the latest of Zhou's former allies to be jailed under Mr Xi's sweeping anti-corruption drive, which some have described as a political purge.
NEW YORK TIMES, AGENCE FRANCE-PRESSE