Reliance Asset Management Malaysia reported to have suspended operations and resigned mandates for Islamic funds - IFN

Reliance Asset Management Malaysia reported to have suspended operations and resigned mandates for Islamic funds

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MALAYSIA: Reliance Asset Management Malaysia (RAMMy) is reported to have ceased its operations in Malaysia. Sources have conveyed to Islamic Finance news that the asset management firm has already reported its suspension to the Securities Commission Malaysia, although nothing has yet been officially announced by the regulator. RAMMy is a 100% subsidiary of Mumbai-based Reliance Capital Asset Management, which is in turn is part of Indian conglomerate Reliance Anil Dhirubhai Ambani Group. Reasons for the cessation are yet to be revealed, however it has been speculated that the holding company is in the midst of restructuring. Other possible causes could be difficulties experienced in raising sufficient funds under management to create a sustainable enterprise. According to a confidential source speaking to Islamic Finance news however, RAMMy is still said to be considering its options in Malaysia. Following its incorporation in 2009 the firm launched three funds: the WSF Reliance Global Shariah Growth Fund, a fund launched in Guernsey under the World Shariah Funds platform; the Reliance India Shariah Growth Fund; and the Reliance China-India Shariah Growth Fund, both incorporated in Mauritius. According to its annual report, Reliance Capital made a loss of INR556 million (US$8.78 million) on a write-off related to its subsidiaries in the UK and Malaysia. The company invested approximately INR639 million (US$10.09 million) therein and has since incurred consistent losses over the past few years. Taking into consideration the poor performance and the discouraging business prospects, the operations of these two subsidiaries are thus believed to be scaling down.