A slew of privately offered fund managers in China have just had their registrations cancelled over a range of improprieties.
On 24 May the Asset Management Association of China (AMAC) announced that the registrations of 20 privately offered fund managers had been cancelled as a result of operational irregularities.
17 of these fund managers, including Shanghai Longtou Asset Management Co., Ltd. (上海隆投资产管理有限公司), were unable to submit specialist legal opinions that satisfy requirements within three months of written notice, while three entities, including Beijing Chunxiao Huishang Equity Investment Management Co., Ltd. (北京春晓汇商股权投资管理有限公司) have bene unable to continue to satisfy the requirements for privately offered fund managers.
Beijing Chunxiao enjoyed a rapid rise following its establishment in 2015 and the launch of five renminbi funds with total assets under management of nearly 2 billion yuan.
The fund manager billed itself as the “Porter for Unicorns” after making investments in a range of star projects, yet its fortunes began to take a dive in 2018 amidst tightening regulation of the online finance sector.
Five online finance platforms with ties to Beijing Chunxiao were placed under investigation, including Jucaicat (聚财猫), Junrongdai (君融贷), Shitou Licai (石头理财), Niubanjin (牛板金) and Zhaoqianmao (抓钱猫), involving loans of nearly 10 billion yuan.
Beijing Chunxiao was subsequently alleged to have engaged in illegal affiliate financing and joint-financing, with founding partner Han Yue (韩越) arrested in August of last year.