June 10 (Bloomberg) -- Shanghai Land Holdings Ltd., a developer controlled by a tycoon under investigation for fraud, placed itself in court receivership, citing ``unorthodox loans'' worth 650 million yuan ($79 million) at two subsidiaries.

The ``recent reported'' arrest of tycoon Zhou Zhengyi, China's 11th richest man in Forbes magazine's ranking, and an investigation of his wife Mao Yuping by Hong Kong's Independent Commission Against Corruption pose an ``obvious damaging risk to the business of the group,'' the company said in a statement.

Investigations into Zhou's businesses, which have assets of HK$2.35 billion ($302 million), extend a crackdown on fraud among China's new breed of entrepreneurs. Yang Bin, another on the Forbes list of China's richest, goes on trial today in China, charged with fraud and bribery. Yang was the founder of Hong Kong- listed flower grower Euro-Asia Agricultural Holdings Ltd.

Bank of China (Hong Kong) Ltd., which said on Friday it's investigating a HK$1.8 billion ($231 million) loan to Zhou, has put New Nongkai Global Investments Ltd., a closely held unit by Zhou, into receivership, Shanghai Land said.

The `unorthodox'' loans at units Shanghai Wang Xin Property Ltd. and Shanghai Yihe Longbai Hotel Ltd. comprised 25.9 percent of the group's net assets, the company said.

Ernst & Young LLP's Stephen Liu and Kenneth Yeo were named by the High Court of Hong Kong as receivers.

Shanghai Land said it's not ``in liquidation'' because no company has filed a bankruptcy petition against it.

Shares in the Hong Kong-listed company were suspended on June 2. They last traded at 34.5 Hong Kong cents, and have lost more than 40 percent since the reports surfaced last month.

Last Updated: June 9, 2003 20:51 EDT