Jardine Boss Quits Over Trade Scandal

The embattled chairman of Jardine Fleming Holdings Ltd called it quits on Thursday in the wake of a trading scandal that rocked the foundations of Hong Kong's biggest fund management company.

Alan Smith, 53, announced his retirement following a radical corporate shake-up that included the creation of a new supervisory board at Hong Kong's oldest merchant bank.

With the restructuring in place, I have decided that it is an appropriate time for me to step down as chairman, Smith said in a news release.

Managing director Henry Strutt, who replaces Smith as chairman, denied that the resignation or the corporate overhaul were precipitated by the trading scandal at the company's fund management subsidiary, Jardine Fleming Investment Management.

 

No, Strutt said, when asked if there was a connection.

The shareholders have been discussing for quite some time the structure of how they would involve themselves in the group going forward, he said.

Regulators in London and Hong Kong hit Jardine Fleming with heavy penalties last month after revealing that a Hong Kong-based fund manager was allocating trades late, allowing for a change in price. Some trades involved his personal account.

Jardine Fleming was fined 700,000. It voluntarily paid $19.3 million to disadvantaged clients.