Hua An International Balanced Fund, China's oldest QDII fund, has suspended redemptions and its principal may suffer losses due to the bankruptcy filing of its business partner Lehman Brothers, China Business News reported on Tuesday.
The fund's manager, Hua An Fund Management, said in a statement published on its website that "the future existence of the fund will be significantly affected if Lehman Brothers remains unable to exercise its obligations towards the guaranteed structured notes".
Hua An International Balanced Fund, launched in November 2006, was the first product offered under China's limited qualified domestic institutional investor (QDII) scheme and received a US $500 million foreign exchange investment quota. Lehman Brothers Finance SA, a unit of Lehman Brothers, guarantees the structure notes held by the fund. The fund's net asset value was 0.954 yuan per unit at the end of last month.
The newspaper quoted informed sources as saying that Lehman Brothers' sudden filing for bankruptcy has prevented Hua An from being able to define the exact impact on the fund.
Hua An said it will closely monitor developments on Lehman Brothers and will take measures to protect investors' interests to the best of its ability.
For more details, please read the complete story in Chinese:
(http://www.china-cbn.com/s/n/000002/20080916/000000099855.shtml)
(China.org.cn by Yan Pei, September 16, 2008)
