KOREA – An arrest warrant has been issued by the South Korean prosecuting authorities for former Hermes Investment Management fund manager Robert Clements, who has left the country.

Hermes chairman Richard Bernays told IPE he could not divulge or confirm any information as to Clements’ whereabouts. The move came as the Financial Supervisory Service (FSS) regulator has recommended fining the asset manager roughly £4m (€5.8m) over an alleged stock manipulation case, which Hermes vigorously denies.

However, the prosecuting authorities said in a statement that the case against Clements has been suspended as they are unable to extradite him.

Clements is accused by the FSS of manipulating the market with regards the 2004 sale of Samsung Corp. shares. This allegation followed an interview with a Korean newspaper, where he was reportedly quoted as saying it could be a takeover target.

However, Hermes told IPE that Clements had been misquoted. He was rather trying to dampen down speculation, and sold the stock at a price that was even lower than before the interview.

In a statement issued this morning, Hermes stated it “does not accept” the Korean prosecutor’s charges.

Apart from the arrest warrant for Clements, the prosecutor is also requesting a summary judgment against Hermes, which is owned by the BT Pension Scheme. The issue presents a headache for Hermes’ new chief executive Mark Anson.

“Hermes is disappointed to note that the Korean Prosecutor has filed an indictment for summary judgment, in respect of allegations that have been made against a former fund manager of the firm,” said the release.

Bernays told IPE that Hermes was debating whether to “draw a line under the matter” or carry on and fight the case.

The judgment is due to be held in about a month’s time, and Hermes, together with their lawyers Bae, Kim & Lee, are still deciding on the matter.

“We are disappointed that the Korean Prosecutor has filed charges against the firm. We believe that Hermes has complied with the Korean rules and regulations in all of our activities,” said Bernays.

“We will continue to co-operate fully with the Korean authorities. At the same time, we will be reviewing the matter with our Korean legal advisers before determining our next step.”