Prudential fined £30m by FSA over AIA bid

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INSURANCE giant Prudential has been fined £30 million by the Financial Services Authority (FSA) for not telling it early enough about its bid in 2010 for AIA, AIG’s Asian arm.

Tidjane Thiam, the chief executive at the Pru, has also been censured by the FSA for his role.

Tracey McDermott, FSA director of enforcement and financial crime, said: “Prudential, led by Thiam as chief executive, failed to give due consideration to its obligation to inform the FSA of this transaction, which would have had a huge impact on the group had it gone through.

“That was a serious error of judgement for which Prudential is paying the price.

“Firms should be in no doubt as to the importance of early communication with the regulator in respect of transformational transactions to avoid market and investor disruption.”

McDermott added: “Thiam has also been censured in relation to his role in this matter.

“This case should send a clear message to all board members of their collective and individual responsibility for the decisions they make on behalf of their companies.”

Paul Manduca, the Pru’s chairman, said: “The board has decided to settle this matter in the best interests of the group and all its stakeholders.

“We wish to draw a line under the matter, and to ensure our constructive relationship with our regulators remains good.

“Tidjane acted at all times in the interests of the company and with the full knowledge and authority of the board. The board wishes to express its satisfaction that all parties have agreed to this settlement.”