UK - The 3.1 billion-pound (4.4 billion-euro) Unilever pension fund has withdrawn a 275 million-pound mandate from troubled Putnam Investments, embroiled in the US market timing scandal.

The consumer products company said in a statement: “We took appropriate advice and determined that the most prudent course of action was to terminate the Unilever Pension Fund mandate with Putnam. The assets were moved to Barclays Global Investors.”

Hannah Clarke, communications manager for Unilever’s UK pension fund, said its trustees would review the situation to decide whether or not to put the mandate out to tender.

A spokesman for the Progress Unilever Pension Fund, run from Rotterdam, said that only a very small proportion of the Dutch fund’s assets are managed externally. None of this is run by Putnam.

Putnam’s assets under management fell by 12% last month, to 245 billion dollars, as pension clients withdrew mandates.

Putnam spokeswoman Sinead Martin said: “We are disappointed with the Unilever decision. Many other clients have expressed their trust and confidence in Putnam under a new management team.

“Putnam is putting into place some of the most rigorous governance, oversight, trading and compliance standards in the mutual funds industry, and we think that will come to be recognised by our investors.”

In late October, Putnam was charged with civil fraud by the Securities and Exchange Commission and the State of Massachusetts, on the basis of allegedly allowing improper short-term trading in its mutual funds.

Last month, Steve Oristaglio, Putnam’s co-head of investments, told IPE in an interview that the Boston-based firm was putting the improper trading scandal quickly behind it.