China launches criminal investigation into Evergrande-linked asset manager Hywin for illegal fundraising

The public security bureau in the southern Fengxian district said it had taken “coercive measures” against at least three Hywin employees, it said in a statement on Wednesday. The investigation would be expanded to protect investors, it added.

“The police are collecting criminal evidence on all fronts and making every effort to deepen the investigation to recover losses and protect the interests of investors as best as possible,” the bureau said. Two suspects surnamed Han and Wang were arrested for illegal fundraising, but the amount of funds was not disclosed.

In mainland China, prosecutors can be involved in criminal proceedings if the police request them to assist in further investigations.

The crackdown came nine months after Hywin failed to repay investors when some of its wealth management products matured, sparking a crisis of confidence as thousands of investors worried about the safety of the company’s investments in real estate projects following the collapse of the national property market.