'No plans to change control' says Flemings

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The Independent Online
Flemings yesterday rejected any suggestion that it would take more formal management control of its Jardine Fleming offshoot in Hong Kong or offer to buy control from its partner Jardine Matheson.

A day after the Jardine Fleming investment management businesses were fined and ordered to repay pounds 12m to clients, a Flemings spokesman said: "We have a strong commitment to our relationship with Jardine Matheson and they do too. There will be no change there." He said there had been no discussions about a change in the ownership structure.

Jardine Fleming, the investment bank, was a very good business he said. "We'd love to buy the other 50 per cent but it's not up for sale - Jardine would like the other 50 per cent too." The result of this impasse was that the status quo would continue, he said.

The two shareholdings areequal, giving no one side a controlling interest, which has led to suggestions in London that Flemings will want to take full control or get out altogether.

At present there is only an informal arrangement in which Flemings in London takes the lead on investment banking decisions in Hong Kong, but only in consultation with Jardine Matheson.

Flemings also defended the decision to keep Robert Thomas, chief executive of Jardine Fleming Asset Management, as a director of Jardine Fleming Holdings, even though he has been removed from the register of investment managers in Hong Kong.

Mr Thomas's new job is in charge of business development. Flemings said he had a great nose for new business, had accepted "very honourably" his responsibility for an error of omission in management and there was no reason why he should be penalised further.

The spokesman refused to say whether Mr Thomas would lose earnings as a result of his change of job.

Flemings said that Colin Armstrong, the Jardine Fleming manager at the centre of the scandal, had completed the voluntary payments agreed to Jardine Fleming Investment Management. The payments, which represent profits Mr Armstrong, who is now in the UK, made on diverting profitable trades to his own account, have been passed on to JFIM's clients. Flemings insisted that the three funds that had been disadvantaged were only a tiny proportion of Jardine Fleming's pounds 15bn investment management business.