CHINA sentenced former hedge fund manager Xu Xiang to five-and-a-half years imprisonment for market manipulation, in one of the most high-profile cases following the 2015 market rout, a court in the eastern city of Qingdao said in its official Weibo account yesterday.

    Xu, general manager of Shanghai-based Zexi Investment Management Co., who earned nicknames like “hedge fund brother No.1” and “China’s Carl Icahn” in local media for his winning record in the stock market, was charged with colluding to manipulate share prices in an operation from 2010 to 2015, the court said in a statement. Xu was detained in November 2015.

    Wang Wei, another defendant whom Xu collaborated with, was sentenced to three years in jail while Zhu Yong, a third, was given two years with a three-year reprieve on the same charges.

    Between 2010 and 2015, Xu — either alone or with Wang and Zhu — colluded with the chairmen or the “actual controlling shareholders” of 13 listed companies in driving up their share prices, using non-public information, and made huge profit from such illegal activities, the Qingdao Intermediate People’s Court said in the statement.

    Xu controlled almost 100 trading accounts opened by his relatives, employees and employees’ relatives, the court said last year. The executives and owners have been charged separately.

    The money involved and illicit gains from their manipulation were “especially huge, and the circumstances specially serious,” the court said, without disclosing the amounts. The three hedge fund executives were also fined, the court said, without providing details. They won’t appeal their sentences, according to the court.

    Zexi Investment ran four of China’s top 10 performing hedge funds between June and August in 2015, the period of the share market collapse, according to independent ratings company Shenzhen Rongzhi Investment Consultant Co. Zexi Investment’s five funds returned an average 249 percent in the first nine months of that year, when the Shanghai Composite Index fell 6 percent, Shenzhen Rongzhi said.

    Xu was detained by police in November 2015 on the highway between Shanghai and Ningbo, in an arrest that was captured in photographs and widely circulated on social media. Police later froze more than US$1 billion in shares in listed companies with connections to Xu’s investments, according to exchange filings by those firms. (SD-Agencies)