Pru bosses resist calls to quit after failed AIA bid
Published 08/06/2010 | 08:00
Prudential's top bosses have faced down calls to resign over the collapse of the company's Asian expansion plans.
Several shareholders at an ill-tempered annual meeting said the board should pay "the price of failure" after its $35.5bn (£24.5bn) bid for Asian insurer AIA foundered last week.
But Belfast-born chairman Harvey McGrath said the board had "total confidence" in the management of the company, although he apologised to shareholders for the "discomfort and worry" caused by the failed bid.
The company was left with a £450m bill from the collapse of the venture but chief executive Tidjane Thiam - who masterminded the bid - and Mr McGrath have claimed they have the support of major shareholders.
A trading update published before yesterday's meeting in central London boosted their fight for survival after it emerged that group-wide sales rose 27% in the first five months of the year to £1.35bn.
The performance failed to placate a section of the company's private shareholders, some of whom called on the top bosses to resign.
Investor Anthony Watts fumed over the high price struck for the deal, which foundered when US parent AIG refused to renegotiate the deal, and said the board had failed to do its job properly.
He added: "You're experts. You're a disgrace, a disgrace. You and the board made the judgment call, you and the board got it wrong. It has been a shambles from start to finish - you and the board should do the honourable thing."
Fellow shareholder Tom Heath said smaller investors had been disenfranchised and accused the firm of arrogance, while shareholder John Farmer said management had been "irretrievably tainted" by the failure to land AIA.
Mr Thiam, who has been chief executive of the business for less than a year, admitted that some of his actions had put "significant strain" on relationships with shareholders and pledged to "begin the process of restoring your confidence".
Despite the criticism of the price, Mr McGrath added that the deal "did not want for forensic attention".
He said regulatory delays "clearly did not help confidence" but added that he was "more convinced than ever" over the Pru's prospects.
"We believe that AIA would have accelerated growth but we have no doubt that we will find growth without it."
Many shareholders also spoke up for the insurer's strategy and one called on Mr Thiam to "fight on".
Northern Irish chairman Mr McGrath told the meeting that the Pru would look to immediately improve communications with its shareholders.