FSA fines Prudential over AIA bid

Prudential has been hit with a 30m-pound fine and the censure of its Chief Executive Tidjane Thiane for the way it handled its bid for AIA, a life insurance firm and Asian subsidiary of AIG.

Prudential has been hit with a 30m-pound fine and the censure of its Chief Executive Tidjane Thiane for the way it handled its bid for AIA, a life insurance firm and Asian subsidiary of AIG.

The Financial Services Authority (FSA) issued a penalty to the company for failing to inform the watchdog early enough about its intention to acquire AIA.

Prudential, which supplies financial services personal banking, insurance and pensions, issued a statement Wednesday confirming it had agreed to a settlement with the FSA in relation to the breach of conduct.

"We wish to draw a line under the matter, and to ensure our constructive relationship with our regulators remains good" Chairman Paul Manduca said.

"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."

The FSA said the investigation did not concern the conduct of the management of the Prudential. The regulator acknowledged Prudential had considered their obligations in informing the regulator.

"Therefore, although the FSA considers that the circumstances of these breaches are serious, the FSA does not consider they were reckless or intentional," the body said in a statement.

The AIA bid was thrown out after Prudential shareholders objected to the initial deal and AIA's owner, AIG, refused to accept a lower offer.

Prudential shares fell 1.73% to 1,079p at 09:24 Wednesday.

RD

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