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(Sharecast News) - Shares of Man Group tumbled on Friday after the High Court ruled that the investment manager could have to pay around $155m for its part in a corruption case involving Kuwait's state pension fund, the Kuwaiti Public Institution for Social Security (PIFSS).
In a statement released late on Thursday, Man Group said it disagrees with the judgment that the PIFSS is entitled to recover around $155m from the estate of a former Man employee and two of its subsidiaries.
The ruling by the High Court followed a year-long trial over allegations that Fahad al Rajaan, the former director general of PIFSS, had received illicit payments from financial institutions seeking investment mandates.
Man Group said the court has held that two of its former employees, who were part of the regional sales team, were aware that former intermediary, Mohamad El Ghazzi, was making improper payments to Al Rajaan.
"Accordingly, the court has held two Man Group subsidiaries vicariously liable for the conduct of those two former employees," it said. "Notwithstanding this, the Judge did not find that any other former or current employee of Man Group knew about the improper payments, and there are no negative findings in relation to Man Group more broadly."
PIFSS had sought compensation of $156m, plus interest, from the Man Group defendants in relation to the allegations, which date back to between 1993 and 2013.
Man Group said on Thursday that it disagrees with the judgment, in respect of both liability and quantum.
The figures in the judgment are not final and are subject to change. The court has scheduled a hearing in mid-November to deal with matters resulting from the judgment including the exact amount of Man Group's financial liability.
Man Group said it will provide an update on the court's determination in due course. In the meantime, it is evaluating its full range of options.
Man Group pointed out that this is a legacy matter concerning a contract originally entered into more than 30 years ago. It relates to two former employees who left Man Group over 13 and 18 years ago, investment products the company no longer markets and a distribution model that it no longer operates.
"The findings in the judgment do not reflect the way Man Group conducted its business during the period in question or does so today," it said. "Integrity is one of Man Group's core principles, and we promote the highest ethical standards of our people when serving our clients."
At 1440 GMT, the shares were down 7.2% at 298.44p.