A hedge fund managed by accused fraudster Helmut Kiener has gone into voluntary liquidation.

K1 Invest has hired accounting firm Grant Thornton to liquidate its assets, it told investors yesterday. The British Virgin Islands-based fund called the allegations against Kiener, who was arrested last month on suspicion of fraud and breach of trust, “of grave concern.”

The fund says the asset freeze against it have left it unable to pay its bills.

“Voluntary liquidation is in the best interest of the company and the investors,” the letter said.

Kiener, the founder of the K1 Group, is accused of misleading his banks and brokers, causing some US$400 million in losses.