China’s securities watchdog said it is investigating hedge fund Zhejiang Ruifengda Asset Management Co. for suspected illegal activities, while media reports said the fund has failed to pay investors seeking redemptions and that the controlling shareholder is missing, according to Bloomberg.

The China Securities Regulator Commission takes the case seriously and has told the relevant agencies to conduct the inspection of the fund’s operations, the CSRC said in a statement posted on its website Saturday. Zhejiang Ruifengda is suspected of multiple illegal and irregular activities, the regulator said in the statement.

Calls to Ruifengda seeking comment outside of business hours went unanswered.

The hedge fund, which manages assets of more than 2 billion yuan ($277 million), has stopped repaying investors seeking redemptions and its controlling shareholder is missing, the Securities Times reported Friday, citing unidentified people. Some investors reported the case to local police, the newspaper said.

Economic crime investigators in Shanghai sealed off the company’s office in the city, news outlet Yicai said in a separate report.

Many of the Zhejiang Ruifengda investors were institutions including securities firms, the Securities Times said, citing an unidentified person. One private fund tried to redeem its investment in Ruifengda in March and is yet to receive about 33 million yuan, according to the report, which cited the client.

Ruifengda was set up in 2016 and manages more than 3 billion yuan, according to its website.

China is tightening scrutiny of hedge funds, with new rules unveiled last month raising the asset threshold and curbing their use of leverage and derivatives. The rules, set to take effect Aug. 1, are expected to weed out weaker and less compliant players.