Funds News
- Mainland's first 'rat trader' fired
Date: 18-May-2007 Sources: (Xinhua Online)
JP Morgan's China asset management venture said yesterday it had fired a senior fund manager over an official probe into stock trades, making him the first mainland fund manager to be sacked over suspicion of illicit stock trades.
'We have just been informed by regulatory authorities that they have started a formal investigation of our employee Tang Jian over investment irregularities and we found Tang Jian is suspected of using insider information to engage in illicit investment activities,'Shanghai-based China International Fund Management Co. said in a statement.
'Our company removed Tang Jian from all posts in the company last night and dismissed him,'it said.
Tang, a well-known Chinese fund manager who joined the company in 2004, could not be reached for comment.
The move came after a regulatory probe launched last month, which has proved that Tang had helped his relatives know his fund's investment decisions in advance and let them reap illegal profits from the information.
Under mainland regulations, fund managers are barred from buying securities on their own. But industry sources say many fund managers have actually ignored the ban to invest in stocks through accounts opened under friends' or family members' names.
Tang's relatives have benefited from buying shares of Shanghai-listed Xinjiang Joinworld Co. before the fund that Tang manages bought them and sold the stocks earlier than the fund's move, the Caijing magazine said yesterday.
The illegal activity, known as 'rat trading,'has brought about a combined profit of 1.5 million yuan (US$195,000) to Tang's relatives, according to the report. Tang will be subject to criminal charges.
Tang, 33, started to manage the China International Growth-leading Fund in September 2006, whose equity holdings totaled more than 10 billion yuan in value by the end of last year.
Before joining China International in 2004, Tang was an information-technology analyst at Shenyin & Wanguo Securities Co. and also worked at Orient Securities Co. He holds a M.S. degree from Shanghai Jiaotong University.
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