Prudential PLC chairman Harvey McGrath defended the British insurer’s failed US$35.5 billion takeover of AIA Group Ltd after investors called for him and chief executive officer Tidjane Thiam to quit.
Prudential is “convinced” that the attempted purchase of AIA was the right strategy and that it was “in the best interests of investors,” the chairman told shareholders at the company’s annual general meeting in London yesterday. The board doesn’t support management changes, said McGrath, who also apologized for the costs of the failed bid, while calling them “affordable.”
McGrath and Thiam are trying to show shareholders they have a plan to expand in Asia after the acquisition failed amid disagreements with large investors, the UK regulator and AIA’s parent, American International Group Inc. The 47-year-old CEO has already apologized to investors for spending £450 million (US$651 million) in fees on the deal, and Prudential yesterday ruled out making another attempt to acquire AIA.
“Somebody has to be held accountable for this monumental mess,” Robin Geffen, founder and chief investment officer of London-based Neptune Investment Management Ltd, said in a telephone interview.
Thiam and McGrath’s positions are “untenable,” he said. Neptune owns 0.2 percent of Prudential.
The insurer’s revenue in the first five months of the year grew 27 percent to £.36 billion, compared with the same period last year, as policy sales in Asia rose 33 percent, Prudential said separately in a statement on Monday. The company’s Asian unit had its highest rate of sales growth on record in April and last month, up 38 percent from last year.
Thiam said in an interview on Friday that his main priority in Asia would be to hire more agents to sell policies in the region.
Prudential is in “extremely good shape,” the chairman said today. The company has no doubt it will grow without AIA, he said.
Thiam said at the meeting that Asia’s potential is “extraordinary,” and that growth at the company’s business there will “accelerate.”
Prudential dropped 5 pence, or 0.9 percent, to 551 pence at 11:35am in London trading, valuing the firm at about £14 billion. The FTSE 100 index of leading UK firms fell 0.5 percent to 5102.65 points.
Prudential’s managers “have the support of the non-executive directors,” spokesman Ed Brewster said on Friday.
“I’m the servant of the shareholders and if the shareholders wanted me to resign, of course I would,” Thiam said in a Bloomberg Television interview. “They have not expressed that desire.”
Former CEO Mark Tucker is a candidate to replace either Thiam or McGrath, the Financial Times reported yesterday, citing two unidentified top 15 shareholders.
Thiam, who became CEO in October, has sought to justify the AIA acquisition by saying the deal would have accelerated his plan to expand in Asia. Prudential would have become the biggest life insurer in Hong Kong, Malaysia, Thailand, the Philippines and Vietnam had the deal been completed.
NO-LIMITS PARTNERSHIP: ‘The bottom line’ is that if the US were to have a conflict with China or Russia it would likely open up a second front with the other, a US senator said Beijing and Moscow could cooperate in a conflict over Taiwan, the top US intelligence chief told the US Senate this week. “We see China and Russia, for the first time, exercising together in relation to Taiwan and recognizing that this is a place where China definitely wants Russia to be working with them, and we see no reason why they wouldn’t,” US Director of National Intelligence Avril Haines told a US Senate Committee on Armed Services hearing on Thursday. US Senator Mike Rounds asked Haines about such a potential scenario. He also asked US Defense Intelligence Agency Director Lieutenant General Jeffrey Kruse
INSPIRING: Taiwan has been a model in the Asia-Pacific region with its democratic transition, free and fair elections and open society, the vice president-elect said Taiwan can play a leadership role in the Asia-Pacific region, vice president-elect Hsiao Bi-khim (蕭美琴) told a forum in Taipei yesterday, highlighting the nation’s resilience in the face of geopolitical challenges. “Not only can Taiwan help, but Taiwan can lead ... not only can Taiwan play a leadership role, but Taiwan’s leadership is important to the world,” Hsiao told the annual forum hosted by the Center for Asia-Pacific Resilience and Innovation think tank. Hsiao thanked Taiwan’s international friends for their long-term support, citing the example of US President Joe Biden last month signing into law a bill to provide aid to Taiwan,
China’s intrusive and territorial claims in the Indo-Pacific region are “illegal, coercive, aggressive and deceptive,” new US Indo-Pacific Commander Admiral Samuel Paparo said on Friday, adding that he would continue working with allies and partners to keep the area free and open. Paparo made the remarks at a change-of-command ceremony at Joint Base Pearl Harbor-Hickam in Hawaii, where he took over the command from Admiral John Aquilino. “Our world faces a complex problem set in the troubling actions of the People’s Republic of China [PRC] and its rapid buildup of forces. We must be ready to answer the PRC’s increasingly intrusive and
STATE OF THE NATION: The legislature should invite the president to deliver an address every year, the TPP said, adding that Lai should also have to answer legislators’ questions The Chinese Nationalist Party (KMT) yesterday proposed inviting president-elect William Lai (賴清德) to make a historic first state of the nation address at the legislature following his inauguration on May 20. Lai is expected to face many domestic and international challenges, and should clarify his intended policies with the public’s representatives, KMT caucus secretary-general Hung Meng-kai (洪孟楷) said when making the proposal at a meeting of the legislature’s Procedure Committee. The committee voted to add the item to the agenda for Friday, along with another similar proposal put forward by the Taiwan People’s Party (TPP). The invitation is in line with Article 15-2