Ex-Morgan Stanley’s Zain Fancy Sues Och-Ziff Over Firing, Withheld Wages
Zain Fancy, who joined Och-Ziff Capital Management Group LLC (OZM) from Morgan Stanley in 2008, sued two units of the New York-based hedge fund manager in Singapore, claiming they withheld $7.9 million in pay and stock that he was owed.
Och-Ziff Real Estate Singapore Pte, a venture in which Fancy was the founding partner and executive managing director, had no basis for firing him in October and owed him $1 million in wages and $6.9 million worth of stock, according to Fancy’s lawsuit filed with the Singapore High Court. A closed hearing is scheduled for March 25.
Fancy acted in bad faith by not fully disclosing his involvement in a probe by the U.S. Department of Justice and the U.S. Securities and Exchange Commission into alleged corruption at Morgan Stanley, where he had been head of the bank’s real estate business in Asia, according to court papers filed by Och- Ziff.
“Mr. Fancy’s involvement in pending investigations, coupled with other factors unrelated to Och-Ziff, have prevented the parties from raising third-party capital for the venture and rendered the venture unworkable,” Chief Financial Officer Joel Frank said in a filing. “His actions have resulted in a breach of trust.”
Fancy didn’t respond to an e-mail seeking comment. His lawyer Cavinder Bull from Drew & Napier LLC declined to comment as did Och-Ziff spokesman Jonathan Gasthalter. SEC spokesman John Nester and Justice Department spokeswoman Laura Sweeney also declined to comment.
London Arbitration
Fancy has also started arbitration proceedings against Och- Ziff in London, claiming breach of a partnership agreement. Och- Ziff is seeking a court order to halt the Singapore lawsuit in favor of the London proceedings, a move Fancy called “nothing more than a tactical ploy,” in a Dec. 10 filing.
Och-Ziff, which had assets under management of $28.7 billion as of March 1, hired Fancy and three other former Morgan Stanley (MS) real estate executives in 2008.
Och-Ziff rose 2.5 percent to $15.72 in New York Stock Exchange trading. The stock has gained 0.9 percent this year.
Fancy, who was paid $500,000 a year, a $10 million signing bonus and was entitled to $35 million worth of Och-Ziff restricted shares, isn’t aware of his status in the investigation by the U.S. authorities, according to court papers.
‘Belated Allegations’
“These belated allegations are nothing more than a transparent attempt to renege on your clients’ clear contractual obligations,” Nish Shetty, Fancy’s lawyer at Clifford Chance, said in an e-mail in September to Och-Ziff’s attorney Edwin Shallert at Debevoise & Plimpton LLP.
Roy Kwok, who reported to Fancy at Morgan Stanley and the founding partner of Och-Ziff Hong Kong, has also been contacted by U.S. authorities in the same probe, the hedge fund manager said in court papers.
Kwok no longer works at Och-Ziff, said a receptionist at the firm’s Hong Kong office. She declined to give her name or provide contact details for Kwok.
“No rational investor would commit capital in the face of uncertainty over the status of key team members,” Och-Ziff’s Frank said in a filing. “Any attempt to solicit capital without full and accurate disclosure as to the status of key members would have been reckless and perilous.”
The case is Zain Asif Fancy v. Och-Ziff Real Estate Singapore Anor S787/2010 in the Singapore High Court.
To contact the reporter on this story: Andrea Tan in Singapore at atan17@bloomberg.net
To contact the editor responsible for this story: Douglas Wong at dwong19@bloomberg.net
Rate this Page