Why is the resignation letter of a star fund manager repeatedly controversial?

Author | Jiang Jinli Ed. | Jiang Shizhou

Qiu Dongrong was rumored to have resigned, and Zhonggeng Fund responded to "overturned". In recent years, there have been many controversies in fund companies dealing with the resignation of star fund managers.

For example, Cai Songsong, the former fund manager of Nuoan Fund, who was recently exposed to bribery and bribery, claimed to be "smuggling" when he left his job, and experienced a rumor refutation storm before leaving.

There are also some "unsolved cases" pending: Yuan Fang, the former "first sister" of ICBC Credit Suisse Fund, resigned during the closed period of the product; Zhang Liang, the former star fund manager of Huaan Fund, resigned during the product fundraising period. Neither fund company has responded or clarified what the truth is.

Such operations have raised questions among investors about the credibility and rationality of fund companies. For the public, what is expected is to respond to the truth in a timely manner, but for various reasons, fund companies often choose to keep a low profile.

Why did the response "overturn"?

From the perspective of fund companies, the news of the "exodus" of star fund managers has spread far and wide, which is undoubtedly a major public relations test. A slight carelessness in the scale may lead to a brand crisis.

In the past, when the Internet was not developed, the flow of information was relatively closed, and fund companies were secretive about it, and usually waited for the internal handling to be properly handled before issuing an announcement.

Today, the tentacles of social media are deep in the hinterland, and there are almost no impermeable walls. It may be that the fund manager here has just submitted his resignation for various reasons and is still pulling with the company, and public opinion on the other side is already boiling.

Since "paper can't hold the fire", this is a great test of the speed and attitude of the fund company's response.

Zhonggeng Fund's response to "Qiu Dongrong was rumored to have resigned" is probably the most overturned in the fund circle in recent years.

The earliest news came out was before the May Day. On April 30, Zhonggeng Fund denied the matter through the media, saying that Qiu Dongrong had no plans to leave office, and the reason for this misunderstanding was that the products he managed would hire additional fund managers.

As soon as the holiday passed, the incident reversed, and the tone changed to "Qiu Dongrong's departure may not be so fast". For a while, the waves rose again. "Caijing" new media once asked Zhonggeng Fund to verify this matter, and the reply was "there will be additional hires in the near future, but others are uncertain".

On May 11, Qiu Dongrong's two funds really issued an announcement on the addition of Wu Chenggen as the fund manager, and Liu Sheng was hired as the fund manager by Zhonggeng Value Pilot.

At the same time, Zhonggeng Fund issued an official response. Excluding the risk warning, the content of the response is more than 1,500 words and involves four questions.

The first question is: why did Zhonggeng Fund make arrangements to hire additional fund managers?

This is actually the question that everyone is most concerned about, that is, whether the increase is related to Qiu Dongrong's resignation. However, Zhonggeng Fund did not respond positively to this matter, but spent more than 400 words to introduce the company's investment research construction, saying that "making arrangements for hiring additional fund managers can maximize the alpha of investment research talents, so that everyone in the investment research team (including fund managers and researchers) can better play the role of systematic development of investment research."

Three more questions were answered: Can you tell us about the resumes of the two additional fund managers? What are the follow-up arrangements in terms of products, personnel appointments and dismissals? What is the effectiveness of Zhonggeng Fund in the integration of investment and research? There was no positive response to the rumors.

It was this response that triggered the third wave of public opinion, which was criticized for being "insincere" and "consuming the trust of investors".

Disclosure of fairness disputes

Extrapolating from the actual situation, even if Qiu Dongrong wants to resign, it will be at least until July. Because he also manages an 18-month closed-end product, which will then be converted to an open-end fund.

Does the announcement of the fund manager's departure have to wait until the last day to be disclosed?

A compliance person from a leading fund company explained to Caijing new media that the resignation letter of fund managers is mainly based on two laws and regulations, namely the Administrative Measures for Information Disclosure of Publicly Offered Securities Investment Funds and the Guiding Opinions on the Management of Investment Managers of Fund Management Companies.

Both statutes state: "... Disclose the change of fund manager in a timely manner, and announce it to the public within two days from the date of the company's decision..."

According to the above-mentioned compliance sources, in practice, the resignation of fund managers needs to be approved by the Asset Management Association before the announcement will be made, "there is no such type of announcement as a resignation announcement, only the announcement of the change of fund manager, and it does not have to wait for the last day to be disclosed, which may be related to the approval of the association or the company's internal arrangements."

However, the news of Yau Dongrong's resignation was initially spread from a channel, which also caused the public to question the fairness of the letter. Is it fair that institutional investors with large funds or channels with the right to speak always learn about the fund manager's departure before retail investors?

The compliance person believes that before the public disclosure announcement, the information disclosed may not be true and does not involve fairness issues. However, if the news of a definite departure is disclosed to a specific person in advance, there is an issue of fairness.

Another compliance person from a medium-sized fund company said: "If relevant information is disclosed to institutional customers and channels in advance without public disclosure, we think this situation is unfair to ordinary investors and undesirable." ”

Zhonggeng Fund is not the only company that has caused controversy.

In recent years, there have been many controversies in dealing with the departure of star fund managers. For example, Cai Songsong, who was recently exposed to bribery and bribery cases, claimed to be "smuggling" when he left his job, and experienced a rumor refutation storm before leaving.

On September 20, 2022, a news that "the top fund manager surnamed Cai lost contact this week" was widely circulated in the industry, and Cai Songsong was pushed to the forefront. The rumor also mentioned that "a fund manager from the same institution has recently been detained".

In the early morning of the next day, Cai Songsong posted a circle of friends, saying that he was "on vacation". Sino Asset Management also responded to the media afterwards: "Our fund manager Cai Songsong is currently on vacation, and the related products under his management are operating normally. ”

On October 15, 2022, Qu Quanru, who was involved in the case with Cai Songsong, resigned. Cai Songsong stepped down from the product in May of the following year and left at the end of September.

The truth was only revealed by Tianyancha half a year later: Cai Songsong, Qu Quanru, Dong Boxiong and others were involved in the "crime of accepting bribes by non-state functionaries and offering bribes to non-state functionaries", and the trial was held in the Jinhua Intermediate People's Court on March 27, 2024, with the case number (2024) Zhe 07 Xingchu No. 1.

There are still some "unsolved cases" in the public offering industry. For example, Yuan Fang, the former "first sister" of ICBC Credit Suisse Fund, resigned during the closed period of the product; Zhang Liang, the former star fund manager of Huaan Fund, resigned during the product fundraising period. Neither fund company has responded or clarified what the truth is.

The public's right to know needs to be further protected

If a fund manager is suspected of illegal acts such as rat trapping, bribery and bribery during his tenure, is the fund company obliged to disclose it?

The compliance person of the above-mentioned head fund company told Caijing New Media that this needs to be seen in combination with the two regulations.

According to Article 36 of the Guiding Opinions on the Administration of Investment Management Personnel of Fund Management Companies, "if the investment management personnel have any of the following circumstances, the chief inspector shall report to the relevant dispatched agencies of the China Securities Regulatory Commission within 3 working days from the date of learning the information: (1) being investigated or dealt with by the relevant authorities for suspected violations of laws and disciplines; …… If a fund manager falls under any of the above circumstances, the company shall suspend or remove him or her as a fund manager. ”

"Only the reporting agency is mentioned, and there is no mention of the requirement to be disclosed to the public." The compliance source said.

According to Article 21 of the Administrative Measures for Information Disclosure of Publicly Offered Securities Investment Funds, "... The fund manager or its senior management personnel and fund managers have been subject to major administrative penalties and criminal penalties due to acts related to the fund management business..."It is one of the major events during the operation of the fund and needs to be disclosed.

"However, before he receives a significant penalty, the fund manager is often a former employee of the fund company, so the fund company has no obligation to disclose." ”

In other words, under the current regulations, even if the fund manager violates the law, the fund company will not involve external disclosure in the handling process.

In this case, how to protect the public's right to know? Seems to be an open issue.