POLICE have frozen US$1 billion in shares in listed companies as authorities probe Xu Xiang, one of China’s best-known hedge fund bosses, for alleged insider trading and stock manipulation.

    Authorities slapped a two-year freeze on 90 million shares held by Xu’s Zexi Investment in Shanghai-based developer Deluxe Family Co., according to a stock exchange statement from Deluxe yesterday. At Tuesday’s closing price, that stake was worth 1.16 billion yuan (US$182 million.)

    In the eastern city of Ningbo, another firm also reported a lock-up, adding to restrictions earlier imposed on stakes held by Xu’s mother, Zheng Suzhen. Zheng hasn’t been named by the authorities as being under investigation. The total value of stakes frozen in four companies is US$1 billion, based on Tuesday’s closing prices.

    Xu, known in China as “hedge fund brother No. 1,” is one of the targets in a wave of investigations as the government tries to assign blame and clean up the market after a summer stock rout. He was detained on the highway between Shanghai and Ningbo on Nov. 1.

    No comment has been available from Xu, whose firm Zexi managed four of China’s top-10 performing hedge funds between June and August, according to Shenzhen Rongzhi Investment Consultant Co.

    On Tuesday night, department store firm Ningbo Zhongbai Co. told the Shanghai Stock Exchange that the police froze 35 million shares owned by Tibet Zetian Investment Development Co.

    In its statement, Ningbo Zhongbai also said that Ningbo Zhongbai’s chairman Xu Jun and a director of the company, Zhao Yibo, couldn’t be contacted.

    On Nov. 3, Ningbo Zhongbai said that it was unable to reach chairman Xu and its controlling shareholder, Xu Boliang, to verify their personal connections with Xu Xiang. (SD-Agencies)