The RCMP has begun an investigation of Manitoba’s Crocus Investment Fund.

After completing a review of the provincial auditor general’s report on the labour-sponsored fund, an independent prosecutor from Ontario, hired by the Manitoba government, recommended that the matter be referred to police for a criminal investigation.

Crocus stopped trading on Dec. 10, 2004 over concerns about the true value of its shares. In April, the fund dropped the value of its shares to just below $7. The shares were valued at more that $10 when trading was halted. The devaluation amounts to a $46 million decrease in the fund’s net asset value.

On Monday, the fund’s board of directors announced that Crocus will not resume trading and will consider selling off assets or merging with other LSIFs in an attempt to recoup as much as possible for the fund’s 34,000 shareholders.

The board has hired Deloitte and Touche to help determine the best way to recoup shareholder money. Already, several companies have said they’re interested in the fund’s portfolio, including Winnipeg-based Jovian Capital, and the Ensis Growth Fund, another Manitoba LSIF.