Twitter icon Email alerts icon Latest News RSS icon Magazine icon Stay connected:

View the article online at http://citywire.co.uk/wealth-manager/article/a732716

Trust board slams ‘negligent’ manager

by Robert St George on Feb 07, 2014 at 08:06

Trust board slams ‘negligent’ manager

The board of ARC Capital Holdings, a £117 million Chinese private equity trust, has publicly criticised its manager over a disputed investment.

In 2010 the fund’s manager – a firm called ARC Capital Partners that is owned by PAG, one of Asia’s largest fund groups – transferred almost £50 million to a subsidiary of the giant Orient Group for the purchase of one of Orient’s businesses.

The deal subsequently fell through, but the money was not returned to ARC. The fund has taken the matter to an arbitration commission in China, which is yet to conclude.

In parallel to this, ARC’s board undertook its own investigation into the transaction.

In a statement to the stock exchange, ARC reported: ‘Following this review (which has taken more than a year to conclude) and having received detailed legal advice, the board is unanimously and firmly of the view that the company has a very strong claim against the investment manager. The board believes that the investment manager has been negligent and/or breached its investment management agreement with the company.’

ARC’s board claimed that the £50 million ‘was paid away, without security or any escrow arrangements, and for merely a contractual promise to transfer all of the consideration shares at a future date if certain pre-conditions were met and, if they were not met, to return the money’.

The board advised that it was unable to provide more detail, on legal advice, but confirmed that it had requested from the manager a response to the allegations and proposals for compensation.

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

Long time coming: is the recovery here to stay?


Ian McVeigh and Steve Davies, managers of Jupiter's UK Growth fund, talk about their predictions for the UK equity space. Click here to watch a series of sponsored interviews with Jupiter's fund managers on the UK equity market.

Today's top headlines

More about this:

Look up the shares

  • Arc Capital Holdings Closed Fund (ARCHu.L)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them

Archive

On the road

Click here to find out more from the Audience Development team.

Sorry, this link is not
quite ready yet