Contrary to the sunny outlook for business growth in Asia given by Standard Life CEO Sandy Crombie in a press briefing in London, the UK insurer is closing down its regional asset management function in Hong Kong. Five executives from its Edinburgh headquarters were spotted on a business-class flight to Hong Kong by AsianInvestor readers and seen checking into Four Seasons the night before executing the deed.

At least six staff are said to have been fired just a week after Crombie's comments at the press briefing on Thursday, March 12. Sources familiar with the situation say the first to be let go was Michael Reed, Asia CEO of Standard Life Investments since April 2005.

Others to be affected include: Ross Teverson, director responsible for Pacific Basin investments; Chay Kaikong, investment director of China and Taiwan and fund manager of the Sicav China fund; and William Malcolm, investment director responsible for Australian stock selection.

Outlook for the sales and marketing staff is still uncertain. At this stage, representative offices in Korea and China have not been affected. The company is still reviewing its Asian business strategy. There is a small possibility that Standard Life may relocate these staff to other business area.

According to information from the Hong Kong Securities & Futures Commission, as of March 20, business director James Cooper and head of compliance Jacquie Garrett still held effective licenses as responsible officers to Standard Life Investments that is under the public registrar.

Separately, sources in China report that Standard Life is trying to offload a partial stake in Heng An Standard Life, its insurance joint venture with Teda Investment Holdings in Tianjin to Bank of China. The sale is pending regulatory review by the state regulators.

Standard Life's executives in Asia refused to comment on this story, citing the situation is subject to ongoing management review. Standard Life Investments first opened its regional headquarters in Hong Kong in 2001.

Prior to joining Standard Life in Asia, Reed was a long-term veteran with Franklin Templeton. His last title at Templeton was regional head for Australia. Previously, he was chief representative for Japan, Korea and a managing director in Hong Kong.

The layoffs are said to be part of Standard Life's overall cost cutting strategy. The UK insurer, third largest in Britain and the biggest player in its home Scotland, has recently experienced a 78% drop in earnings, citing costs to compensate investors in its failed funds. Crombie told press he has set a target of cutting expenditure by £175 million ($251.19 million) by the end of 2010.

Most UK managers who entered Asia earlier this decade now boast that a significant portion of their assets under management are sourced from the region. They point to their activities in Asia as key to the overall health of their global businesses.

However, in comparison, Standard Life Investments has had a more curious existence in the region. More than seven years since it set up shop, the company's AUM sourced from Asia remains negligible in its £123.8 billion ($177.7 billion) global portfolio.

The company is known to have been trimming sales staff in Asia as early as 2007. Some sources say the company has a misguided management strategy; others say its product offering had been too UK-centric and the company has under-invested in its Asian initiatives in terms of product development and servicing capabilities.