The asset manager’s decision, which is effective from today (29 July), relates to Ruffle’s purchase of an unlisted convertible bond issued by a company called Ugent Holdings in 2009. Martin Currie initially raised concerns about the purchase in November 2010 after it transpired that Ruffle was also an investor in Ugent’s parent company and, after an investigation, has decided it must “part ways with” the fund manager.
Manager Shifeng Ke will now take on his responsibilities at Martin Currie as China and Taiwan portfolio manager, working with James Chong, investment director for China, and John Pickard, head of investment, to transition the management of affected portfolios.
Ruffle and Ke, through their company Heartland Capital Management, had run a joint venture with Martin Currie since 2006 called MC China. Ruffle has now announced his intention to exercise his right to buy Martin Currie’s interest in the joint venture, with Martin Currie’s team of 12 Shanghai-based analysts expected to join him. Martin Currie will keep all bar $150m of its Greater China assets.
According to Bloomberg, Ruffle says he is setting up trading, legal and compliance systems for Heartland and will be able to run as a “fully functioning, fully SEC-licensed fund management company”.
Martin Currie said it now intends to recruit a new portfolio manager for A-Shares, a new portfolio manager for Greater China small-cap and a new head of research in the region.
Willie Watt, chief executive of Martin Currie, said: “The board of Martin Currie Holdings commissioned reviews into the circumstances surrounding a transaction in an unlisted security that involved a conflict of interest and into aspects of our relevant operations. These reviews have led us to reinforce certain aspects of Martin Currie’s governance structure.
“Our commitment to the region is as strong as ever and, building on our existing strengths, I look forward to enhancing and developing our capabilities still further to enable us to meet our clients’ long-term goals.”
