China Asset Management has denied that its large-cap select fund is being investigated by the domestic securities regulator, as was reported yesterday by Chinese-language publication Caixin, quoting an unnamed source.

The Beijing-based fund house yesterday told AsianInvestor it is not under investigation.

The fund was run by star portfolio manager Wang Yawei from 2005 to 2012. He was known for buying stocks that went on to surge because of subsequent mergers. He left the company to set up his own private fund firm, as reported.

The large-cap select fund posted an accumulated return of 1,182% from December 2005 to May 2012, according to Shanghai-based consultancy Howbuy Investment Management. The benchmark CSI 300 gained 185% from end-December 2005 to end-May 2012.

The China Securities Regulatory Commission (CSRC) had already investigated the ChinaAMC Large-cap Select Fund and ChinaAMC Select Strategies Fund in 2009, but no action was taken, reports Caixin.

In June 2012, the CSRC bolstered oversight of trading and embarked on a campaign to clean up the country’s capital markets.

It is probing Shanghai and Shenzhen stock exchange trading data from the start of 2009. This February it was restructured and a division was set up to target illegal securities and futures trading.

On Friday last week, the CSRC announced that it had investigated three fund managers, and had handed the cases over to the police. They are under investigation for profiting from non-publicly disclosed information.

The CSRC says a fund manager surnamed Qian working at Everbright Pramerica Fund Management made a profit of Rmb1.6 million ($257,000); a manager surnamed Ou, who had worked at both Harvest Fund Management and China International Fund Management, made a profit of Rmb2.6 million; and a manager surnamed Zhang at Ping An Asset Management made a profit of Rmb15 million.

Since last year, the regulator has launched 38 investigations involving some 10 fund houses and two asset management arms of insurance companies.