BEIJING (Reuters) –
China’s high economic growth and expectations of a stronger yuan are luring global speculative funds into its stock and property markets, a senior foreign exchange regulator said in remarks published on Monday.

Deng Xianhong, vice head of the State Administration of Foreign Exchange, said China must step up efforts to reform exchange rate policies and let the market play a fundamental role in deciding the value of the yuan.

“Against the backdrop of the global financial crisis, China’s good economic fundamentals, a strengthening currency as well as a positive gap in interest rates between home and abroad have been the main reasons attracting a continuous inflow of foreign capital,” Deng told the official People’s Daily.

Since February, the administration had detected 190 illegal foreign exchange transactions involving a total sum of $7.4 billion, he said.

(Reporting by Langi Chiang; Editing by Jonathan Hopfner)

NEW YORK – A money manager accused of concocting ties to a Belgian royal family to con investors out of at least $7 million denied the allegations Wednesday as he faced a mounting toll of civil and criminal charges.

Guy Albert de Chimay pleaded not guilty to grand larceny, forgery and other criminal charges in a Manhattan state court, with federal Securities and Exchange Commission lawyers on hand to serve him with federal court orders related to civil fraud charges the agency unveiled earlier this month.

Together, the cases accuse him of diverting his clients’ money into homes in the Hamptons, hundreds of thousands of dollars in his divorce lawyers‘ bills, car payments and other personal expenses. Authorities also say he paid some investors off with other backers’ money, Ponzi-scheme style.

Chimay “denies the charges, and these are the early stages of a very difficult and complicated case,” said his lawyer, David Liebman. “He denies doing any frauds, forging any documents.”

Chimay, 47, has run a New York-based firm, Chimay Capital Management Inc., that claimed to be the U.S. investment arm of the Chimay family, a centuries-old line of Belgian royalty, according to the SEC’s federal court filings. More than 20 generations have inhabited the family’s castle in Chimay, the same town where Trappist monks brew the beer of the same name.

The money manager told clients he was a prince’s cousin, according to the SEC. He claimed he had access to more than $200 million in “family money,” plus $40 million of his own, according to the Manhattan district attorney’s office.

Trading on his phony pedigree and fictitious assets — bolstered by invented bank statements — Chimay persuaded a handful of his own relatives, friends and others to invest in a so-called “bridge loan facility,” prosecutors said. It promised to return 12 percent a year by making short-term loans to carefully vetted companies, according to the SEC.

“He lied about who he was, how he was managing his clients’ finances, and he even forged bank documents to back up his bogus story,” Manhattan District Attorney Cyrus R. Vance Jr. said in a statement.

Charged thus far with stealing nearly $7 million, Chimay is also suspected of trying to swindle $15 million more from “one of New York’s major financial institutions,” and prosecutors are continuing to investigate his dealings, Assistant District Attorney Aaron Wolfson said. Prosecutors wouldn’t immediately say more about the institution in question.

Chimay, a U.S. and Canadian citizen, went to North Carolina after learning that prosecutors were looking into his activities, Wolfson said. Liebman said Chimay has business in North Carolina.

Chimay was arrested June 11 in Wrightsville Beach, N.C. He was brought to New York Tuesday.

He’s being held without bail after his arraignment Wednesday.

The top grand larceny charge against him carries a potential punishment of up to 25 years in prison, but he could face more if convicted of multiple counts, prosecutors said.