One of the biggest investors in Australian racehorses has severed its previously close relationship with Phoenix Thoroughbreds, a Dubai-based company accused in a US court of using race horses to launder money.

The Aquis group, which is controlled by Hong Kong billionaire Tony Fung, said it would no longer race horses co-owned with Phoenix and had called in its lawyers after Phoenix failed to disclose that its prize money had been frozen in NSW and Victoria.