The 3AC saga continues with unexpected arrest.
Su Zhu, the co-founder of the bankrupt Three Arrows Capital (3AC), has been detained at Singapore's Changi Airport.
According to an announcement by the firm managing the liquidation process of the hedge fund, Teneo, Zhu was arrested while attempting to exit the country shortly after a Singaporean court issued a committal order against him.
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The term "committal order" usually implies a prison sentence for contempt of court, with Zhu being sentenced to four months. The order claims that Zhu "failed to comply with a court order."
As a result, Mr. Zhu will be held in prison to serve his sentence of 4 months under the committal order, during which time the liquidators will seek to engage with him on matters relating to 3AC, focusing on the recovery of assets that are either the property of 3AC or that have been acquired using 3AC’s funds.
The liquidators are committed to ensuring that Su Zhu complies with all court orders, including providing documents and information regarding 3AC's investment activities. Further legal actions could follow if Zhu remains uncooperative during his time in custody.
The arrest is part of an ongoing investigation to recover assets for 3AC's creditors. The hedge fund, which had a net worth of around $10 billion, went under in 2022 after a disastrous investment strategy in the volatile Terra ecosystem.
A similar committal order was also issued against another founder, Kyle Davies. However, the man's current location remains unknown. Meanwhile, Singapore's Monetary Authority has banned both Zhu and Davies from participating in regulated investment activities for nine years.
The arrest of Su Zhu brings a new twist to the ongoing saga of Three Arrows Capital's bankruptcy and efforts to recuperate funds for creditors. With legal authorities now directly involved, it remains to be seen how this will impact the ongoing investigation and what repercussions this will have for the defunct hedge fund and its co-founders.
