NatWest Markets said yesterday that it was to buy full control of Wheelock NatWest, which is 50 per cent owned by Wheelock, the conglomerate Mr Woo controls.
The failure of the arrangement with Mr Woo after such a brief period could be embarrassing for NatWest's ambitions in Hong Kong, because he is one of the leading candidates for the post of chief executive following the return to Chinese sovereignty next year.
NatWest blamed the decision on the increasing risk of operating a partly owned trading business in the Far East and said it had concluded it was best for it to become a wholly owned subsidiary of the bank. The 50:50 joint venture was announced in 1994 and began operating in the second half of last year.
Hong Kong sources said the announcement ended a short and bumpy association between NatWest and Wheelock.
NatWest denied a report that Mr Woo had angrily telephoned Lord Alexander, chairman of NatWest, to complain about the way the joint venture had been operated.
But it refused to comment on claims that it had upset Mr Woo by not telling him of plans to buy Gartmore, the fund management group, which owns a competing Hong Kong business. It confirmed that the acquisition of Gartmore had led to the closure of the fund management business of Wheelock NatWest at the end of last week.
NatWest Markets said recent trading scandals around the world had made it more difficult for joint ventures to operate under British rules in Asian markets with the highest growth, such as equity and derivatives trading.
"We did recognise at a very early stage that there was a certain amount of risk we could accommodate within the joint venture vehicle," John Howland-Jackson, NatWest Markets' newly appointed chairman for Asia Pacific, said in Hong Kong.
"We were perhaps not bargaining on a series of events around the world in a variety of traded markets that would cause such scrutiny of trading businesses."Reuse content