Deutsche Frankfurt moves angers Imro

Imro, the investment management regulator, was angered and seriously concerned last night by news that Deutsche Bank was moving control of some of Morgan Grenfell's unit trust businesses to Frankfurt as a result of the Peter Young scandal in London.

Tessen von Heydebreck, a member of the Deutsche Bank management board, said in Frankfurt that DWS, its German fund management unit, would take responsibility for the risk control aspects of Morgan Grenfell Asset Management's unit trust business.

"Ultimate responsibility for MGAM unit trusts will lie with DWS. We will have risk control," Mr van Heydebreck said.

However, unusually, Imro was not informed of the decision by Morgan Grenfell, which it regulates. Part of this supervision includes analysis of the management structure to consider whether it offers a strong level of internal control.

"Clearly, a separation of related management or compliance functions is not ideal. In some circumstance it may not be acceptable," Phillip Thorpe, chief executive of Imro said yesterday.

A spokesman for Deutsche Morgan Grenfell in London stressed yesterday that day-to-day control of the unit trust business would continue be handled in London.

He said Morgan Grenfell was continuing to seek a replacement for Graham Kane, the former managing director of the unit trust business who resigned because of the affair.

Mr Kane was shown the door along with three other senior executives, including Keith Percy, managing director of the entire MGAM business, and a compliance officer.

The Morgan Grenfell spokesman said yesterday that only internal supervision of the unit trust operation was being moved and that the institutional business was not affected by the decision.

Imro is still conducting its investigation into the Morgan Grenfell fiasco. The regulator can levy hefty fines against the firm if it uncovers breaches of its rules, which include lapsed in internal controls.

Mr Young, sacked in September and now under investigation by the Serious Fraud Office, set up a string of shell companies in Luxembourg and breached limits on the amount of unlisted securities a fund can hold. The discovery of his actions forced Morgan Grenfell to suspend trading its three of its once-top performing funds in early September almost pounds 1.4bn was invested.

Comment, page 23

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Guru Careers: Management Accountant

£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...

Guru Careers: Project Manager / Business Analyst

£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...

Day In a Page

General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'
Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

Flesh in Venice

Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
11 best anti-ageing day creams

11 best anti-ageing day creams

Slow down the ageing process with one of these high-performance, hardworking anti-agers
Juventus 2 Real Madrid 1: Five things we learnt, including Iker Casillas is past it and Carlos Tevez remains effective

Juventus vs Real Madrid

Five things we learnt from the Italian's Champions League first leg win over the Spanish giants
Ashes 2015: Test series looks a lost cause for England... whoever takes over as ECB director of cricket

Ashes series looks a lost cause for England...

Whoever takes over as ECB director of cricket, says Stephen Brenkley
Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power