SHARES of Central China Securities tumbled Friday in Shanghai after the brokerage said two of its asset management products worth 241.5 million yuan (US$35.1 million) are in danger of defaulting after the borrower falsified documents.

The stock slumped 9.84 percent to 5.22 yuan at the close Friday in Shanghai, capping its biggest decline since May 6.

The brokerage said Thursday that it conducted follow-up checks on the products following missed payments to investors in April and May and found that documents used to obtain financing had been fabricated.

Central China Securities didn’t provide more details or name the borrower, but said the case is being investigated by the police.

The two asset management products were backed by Min- xing Pharmaceutical, a drugmaker based in the southeastern province of Fujian, according to the National Business Daily.

“The company will actively assume the responsibility of the manager of the products and take a variety of measures to urge the fundraisers to make the repayment as soon as possible,” Central China Securities said.

The incident also raises questions about risk management procedures at China’s asset managers. Noah Holdings, a Chinese wealth manager, said last week that a 3.4 billion yuan product was in danger of default, accusing Camsing International Holdings of falsifying business contracts. Camsing’s chairwoman has been detained by police in Shanghai. (SD-Agencies)