Japan's financial regulator ordered a halt to all operations of the asset management company, AIJ, on Friday, after it was revealed that the company could not account for over 180 billion yen ($2.3 billion).
According to the Financial Times, AIJ, which managed over 100 company pensions, said it “could not explain to investors” what happened to their money.
Regulators had been investigating the firm since January reported the Daily Yomiuri.
“We’ve ordered AIJ to halt business for a month in order to safeguard investors, as it appears client assets have been adversely affected,” Financial Services Minister Shozaburo Jimi told reporters according to Bloomberg.
The suspension will last from today until March 23, according to regulators, while an investigation of over 260 asset managers is conducted.
AIJ was established in 1989 and employed only 12 people, according to the Financial Times. It had raised red flags among regulators lately because of its good returns despite an economic downturn.
Reuters reported that AIJ may have channeled the funds, which accounted for 90 per cent of pension assets that it managed, into private investment trusts in the Cayman Islands.
This would make it difficult for investigators to trace the missing money.
In a news conference Friday, Minister Jimi said that regulators would now scrutinize all 263 investment management firms in Japan.