Wealthy fund manager, 62, is forced to quit firm where he worked for 36 years after ‘secretly collecting shares for his own benefit in the same companies as his $300bn investment fund’
- Mark Denning, 62, breaking rules by secretly buying shares for his own benefit
- Denning bought them through fund called Morebath Fund Global Opportunities
- Fund appears to be named after the village of Morebath, where he owns a home
A wealthy fund manager has been forced to resign from the firm where he worked for 36 years after he was ‘secretly collecting shares for his own benefit in the same companies as his investment funds.’
Evidence discovered by a BBC Panorama investigation suggests Mark Denning, 62, was breaking rules by secretly buying shares for his own benefit through a secretive fund based in Liechtenstein, called Morebath Fund Global Opportunities.
The fund appears to be named after the village of Morebath in North Devon, where he owns a 9 bedroom house, Morebath Manor, and 21 acres of parkland.
Mr Denning helped to manage more than $300bn (£229bn) of investors’ money at Capital Group, and denies any wrongdoing.
The BBC claim leaked documents show the Morebath fund had invested in a medical research company called Mesoblast, an Indian film company called Eros International and a gold mining company called Hummingbird Resources.
Evidence discovered by a BBC Panorama investigation suggests Mark Denning, 62, was breaking rules by secretly buying shares for his own benefit through a secretive fund based in Liechtenstein, called Morebath Fund Global Opportunities
The programme also investigates Neil Woodford, whose £10 billion investment fund – Woodford Equity Income Fund – is to be wound up, with savers set to lose a third of their cash after a series of his ventures went bad.
In the case of Denning, Capital Group funds invested in all three companies, and the investments in Mesoblast and Eros were made by funds that he helped to manage.
Fund managers are not supposed to invest in the same companies as their funds, because they could profit at the expense of investors.
In the case of Hummingbird Resources, Denning appears to have another conflict of interest as the company was set up and run by his son-in-law.
A spokesman for Capital Group – which manages almost $2 trillion of assets – said Mr Denning was no longer with the firm: ‘We have a Code of Ethics and personal investing disclosure requirements that hold our associates to the highest standards of conduct. When we learned of this matter, we took immediate action.’
The stakes in the three companies were ultimately held through an offshore entity called the Kinrara Trust which was set up and controlled by Mr Denning.
An expert on the financial rules told Panorama that the private purchases by Mr Denning could represent a serious conflict of interest.
Michael Ruck, Investigations Partner at the law firm TLT, said: ‘The whole point behind the regime, in relation to declaring conflicts of interest, is to protect investors.
‘If there was an intention by the fund manager to financially benefit themselves, then that does raise serious concerns in relation to their actions.’
Mr Denning, who had worked at Capital Group for 36 years, denies any wrongdoing.
His lawyers deny that he owns the shares in the three companies because they say he is not a beneficiary of the Kinrara Trust: ‘Our client did not declare his interest in the Kinrara Trust to his former employers because he had been irrevocably excluded as a beneficiary. He believed that he had complied with all of his relevant duties.’
They also say his error was to rely on the advice of a former professional advisor and that the Morebath fund had an independent asset manager and fund administrator.
- BBC Panorama: Can You Trust the Billion Pound Investors? Is on Monday, BBC One, 8.30pm