Jardine Fleming Arm Loses $800m Client

The Hong Kong Jockey Club, which has a monopoly on gambling in the territory and is one of its oldest institutions, said yesterday it was withdrawing one of the three funds it has with Jardine Fleming. The move is a blow to Jardine Fleming as it seeks to stem an outflow of funds and recover from revelations in August that a senior fund manager had been diverting profitable client trades to his own account. Paulus Lee, Jockey Club finance director, said two other accounts would be retained with Jardine Fleming, but kept under review.

He said reforms implemented by the investment bank appeared to be a positive step. A senior Jardine official has said that between $50m and $100m had already been withdrawn from the fund management arm since the affair, while an estimated $3bn is considered vulnerable.

However, the company, which has funds of about $21bn under management, said it has recently received new funds from Japanese clients and anticipates more than $1bn from this source.