The Financial Services Authority (FSA) has fined Prudential GBP30 million (US$45.4) and censured chief Tidjane Thiam over not having followed the correct protocol in notifying the UK regulator ahead of its GBP23 billion bid for AIG’s Asian arm, AIA, in 2010.
The FSA said in a statement: "Prudential failed to deal with the FSA in an open and cooperative manner when it was seeking to acquire AIA in early 2010, because it did not inform the FSA of the proposed acquisition until after it had been leaked to the media on 27 February 2010."
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
The fine will be split between Prudential plc, which was fined GBP14 million for failing to deal with the FSA in an open and co-operative manner, and The Prudential Assurance Company which was fined GBP16 million for the same reason.
A penalty of GBP30 million would be one of the biggest the regulator has levied so far – topping the GBP29.7 million handed to UBS in November 2012 for not preventing "large-scale unauthorised trading" by rogue trader Kweku Adoboli.
The FSA said: "The failure to inform the FSA was significant because it resulted in the FSA having to consider highly complex issues within a compressed timescale before making a decision as to whether to suspend Prudential’s shares."
Prudential launched one of the most controversial bids when it agreed to buy AIA, the Asian wing of insurer AIG, in March 2010. The deal was partly funded by a GBP14.5 billion rights issue but triggered a massive shareholder revolt among investors opposed to the ambitious transaction.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataThe deal’s failure left the Prudential nursing a GBP377 million bill for advisor fees and other expenses, while the company was forced to rebuild many bridges with its investors.
