Closing down its Chinese office following a scandal that resulted in an £8.6 million fine has wiped out nearly all of last year’s profits at Edinburgh-based investment house Martin Currie.
Funds under management fell to £8.1 billion from £11.1bn following the closure of the company’s Chinese business, which pushed turnover down to £65.5bn from £81.6bn.
The result was a collapse in pre-tax profits to £2.3m from £14.1m.
Last month regulators in the UK and the US imposed the £8.6m fine on the firm following fraudulent use of client funds in China.
The company was found guilty of failing to manage a conflict of interest between two of its clients.
It wrongly advised a US mutual fund, the China Fund Inc, to invest £15m in a transaction that rescued a struggling Chinese hedge fund. Both funds were managed by Martin Currie’s Shanghai office.
The part of the fine imposed by the Financial Services Authority was the largest-ever handed down by the British regualtor in a case involving a conflict of interest.
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