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Chinese authorities took a hedge fund chief into custody to 'assist' with a police investigation into market manipulation

Aug 31, 2015, 22:47 IST

Li Yifei, Man GroupYouTube

Chinese authorities have taken Li Yifei, head of the Man Group hedge fund's China division, into custody, Bloomberg reports.

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She is not under criminal inquiry, and officials just want her to help them with a police investigation into market manipulators, according to the report.

Comforting.

China's stock market indexes have been convulsing since June 12, when both the Shenzen and Shanghai indexes reversed what had been a year-long monster rally.

Chinese regulators have done everything from canceling initial public offerings and share issues to throwing money into the market in an effort to stem the bleeding.

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None of it has really worked. It seemed as if the carnage had stopped on July 8, but the slide started again on August 15.

Authorities have blamed foreigners and bad actors in the market for causing chaos.

On Monday, China's CCTV aired the confession of a Chinese business journalist for the magazine Caixin. Wang Xiaolu admitted to causing instability in the market by getting information "through private channels" and then adding his "own subjective judgment" to his reporting.

"During a sensitive period, I should not have published a report which had such a huge negative impact," he said.

More than 100 others have been arrested in connection to issues relating to the stock market crash.

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Li's husband told Bloomberg that she was with the relevant authorities (though he didn't know who they were) and that he expected her home soon. Her cell phone was turned off when reporters tried to contact her.

Man Group, with $78.8 billion under management, is the largest publicly traded hedge fund in the world. Li is a national champion in Chinese martial arts and has been voted one of Fortune's 50 most powerful women in the world for four years in a row.

To read the full Bloomberg article click here.

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