WASHINGTON - The University of Michigan, defense contractor Lockheed Martin Corp., and a foundation helping Appalachian children all own stakes in an Asian investment fund backing two major Chinese companies, which froze their stocks last week after failing to file their financial statements on time.

The U.S. groups invested in the $1.4 billion fund - managed by New York banking giant Morgan Stanley - for their endowments or retirement funds, parts of which could be at risk after news that auditors have yet to sign off on the Chinese companies' books. Those delays sometimes precede accounting concerns, but the firms declined to explain the cause.

The millions of dollars the American investors have placed in the fund account for only a small part of their financial portfolios, so the potential risk is small. But as U.S. investors increasingly consider Chinese stocks, they are reliant on banks like Morgan Stanley to guide their decisions and keep troubled companies from reaching the market.

The twin filing delays also raise new questions for Morgan Stanley, which picked the companies from obscurity and then promoted them as multibillion-dollar growth stories.

The publicly traded Chinese companies, Tianhe Chemicals Group Ltd. and Sihuan Pharmaceutical Holdings Group Ltd., separately announced late last week that they would be unable to meet Hong Kong Stock Exchange deadlines. Both companies pledged to cooperate with the auditors.

Tianhe and Sihuan are valued at $3.7 billion and $6 billion, respectively. They are among 16 companies that comprise a private equity fund managed by Morgan Stanley, known as Morgan Stanley Private Equity Asia III. An Australian and an Indian company owned by that fund have already failed amid criminal and civil fraud allegations.

A spokesman for Morgan Stanley, Nick Footitt, declined to comment on this story. A Tianhe spokeswoman also declined to comment. Sihuan responded to some questions in an e-mailed statement, saying only that the auditors needed more time and that the company was operating as usual.

The University of Michigan invested about $20 million in the fund for its $9.7 billion endowment. The Claude Worthington Benedum Foundation, which supports education and development in Appalachia, holds a $2.8 million stake as part of a $375 million endowment. Lockheed Martin's pension fund is also an investor, according to Bloomberg data, but the size of its stake is unclear.

The university declined to comment on this story. A representative for the Benedum Foundation said his group would look at the investments but couldn't elaborate. Lockheed Martin did not immediately return a phone call and e-mail seeking comment Monday.

"This is not something an auditing firm would do lightly," said Paul Gillis, a former partner for PricewaterhouseCoopers in China who now teaches accounting at Peking University. "There are only two reasonable explanations for being late. One is management incompetence. Two is they're fighting with the auditors. And neither one of those is good."