BY THE time news about a regulatory investigation into Jardine Fleming, the territory's flagship fund manager, first leaked out in March a major corporate restructuring was already under way. Last week teams of seconded lawyers and consultants were still reviewing and reforming the company procedures from senior management to clerical level. The company remains on a regulatory watch-list and must undergo another independent accounts review before next February. The multi-million dollar restructuring is another act of penance following last month's damning judgment by Britain's Investment Management Regulatory Organisation and the local Securities and Futures Commission (SFC). It appears to be aiming to both appease the regulators and exorcise a corporate culture that led to last month's $8.4 million fines and $150 million bill for compensation to investors. A serious attempt is being made to rid the company of what one senior fund management described as Jardine's 'gunslinging, free-wheeling' approach. Since April, a string of senior Jardine Fleming Investment Management directors and senior staff have quit Jardine House. But their demise has only been the public manifestation of the most rigorous review in the company's history. In March the blue-chip law firm Linklaters & Paines finalised a preliminary review of compliance procedures ordered by worried senior management. Called the 'Action Plan', it set out a blue-print for profound reform and a timetable for reviewing 'action items' that will continue to the end of next month. One of the first heads to roll was the luckless Robert Thomas who resigned as managing director of Jardine Fleming Asset Management's board to make way for Mark White who was brought back as chief operations officer. Mr Thomas was ultimately to bear responsibility for the company's compliance failings and was banned for life from working as an investment manager. His replacement was seconded from the position of investment director of London-based Save & Prosper, the retail division of British merchant bank Robert Fleming and Fleming Flagship Funds. Mr White, who had been a director of Jardine Fleming Holdings and Jardine Fleming Investment Management from 1985 to 1993, had returned to Britain to assist in a radical restructuring that resulted in a virtual boardroom clean-out and corporate relaunch. There were ominous signs that the skills honed during his London stint would be needed again. In April management consultant Coopers & Lybrand was called in to overhaul the company's rule book and, if necessary, start again. A high level team of consultants were told to 'document and review' the investment management group's ways of handling accounts, its dealing procedures and fund administration operations. Meanwhile, Mr White was not liking what he could see from his glass walled office at Jardine House. His first high profile appointment was the recruitment of Tim Freshwater, former head of Slaughter & May's prestigious corporate law practice in London. Mr Freshwater was given the 'big picture' job of charting a way out of the mess into which the imminent regulators report would plunge the group. He has also been given the task of heading-up legal and compliance work. A new head of the group legal department has been appointed. Clive Brown was brought in as the finance director of the investment management operation while Paul Gallagher, formerly of Morgan Stanley, was appointed as Jardine Fleming Holdings director in charge of group operation. At an organisational level, it was decided to separate the company's legal operations into two departments - company secretarial and group legal department. It was also decided to split the compliance and internal audit functions. The former head of audit has gone and the section has been boosted to 12 staff. Robert Fleming, the blue-blooded London partner firm, will be given a much bigger say in their Asian cousin's operations. It will provide the new head of compliance and the team will be nearly doubled to 10 members. Three experienced compliance managers have been recruited, two of whom will be concentrating solely on the investment management business. Internal reporting lines have been revamped and the head of compliance has to report directly to the managing director of Jardine Fleming Holdings. In addition, independent reports will be regularly made to the Jardine Fleming Group compliance and audit committee. Client dealing procedures have also been revised and new allocation procedures - as yet unspecified - have been announced. A computerised central dealing system will be introduced into Tokyo by the end of next month and Hong Kong by March. A head dealer has also been appointed in Hong Kong and new procedures including a paper-based central dealing system will be introduced. A new internal disciplinary code for non-compliance has been introduced and computer systems, which the company claims will monitor any breach of investment guidelines, are being installed. Fund managers also have been prohibited from personal account dealing until given the green light from the SFC.