(Bloomberg) — China is probing a hedge fund firm with stellar returns after it stopped repaying investors, following tightening scrutiny on the 5.5 trillion yuan ($760 billion) industry.

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The China Securities Regulatory Commission said Saturday night it’s investigating alleged illegal activities at Zhejiang Ruifengda Asset Management Co. and would seek to resolve related risks “prudently.” The announcement after local state media reported on Friday that the firm was no longer paying investors redeeming money and its controlling shareholder was missing.

The case could prompt further scrutiny from regulators who are already tightening rules in a bid to raise the asset thresholds and weed out weaker and less compliant players. It comes after an alleged fraud late last year ensnared financial firms and exposed loopholes in their risk management.

Set up in 2016, Ruifengda manages 3 billion yuan of assets and made a name for creating one product that returned 795% in less than two years through April 30, according to data compiled by Shenzhen PaiPaiWang Investment & Management Co.

The CSRC didn’t elaborate on the alleged illegal activities.

Some of Ruifengda’s products had promised returns of at least 8% annually — a banned practice — and were guaranteed by a unit of a company called Riying Holdings, which has an office near Ruifengda’s Shanghai office, state-backed media Yicai reported, citing unnamed investors. Riying’s chairperson Li Min and Ruifengda’s de facto owner Sun Wei are known among investors as a couple, the report said.

Ruifengda’s biggest shareholder was listed as Qiu Wenlong, who owns 80%, while Liu Licheng holds the remaining 20%, according to registry information on Asset Management Association of China’s website.

Both Ruifengda and Riying’s offices have been sealed off by local police, the state-owned China Securities Journal reported, citing its reporters’ onsite checks. Li and Sun are both missing, it added.

Li, Sun and the companies couldn’t be reached for contact for this story.

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