CORPORATE governance activist Pirc is urging Prudential shareholders to vote against the re-election of Tidjane Thiam as a director at the annual meeting.
Mr Thiam was censured by the Financial Services Authority in March after Prudential was fined £30 million for two regulatory breaches relating to its aborted £23 billion acquisition of Asia-based AIA three years ago. The deal was pulled after strong opposition from shareholders, triggering a £153m break fee and costs to the Pru of £377m.
Mr Thiam failed to give the regulator advance warning of an acquisition which had "the potential to impact on the stability and confidence of the financial system in the UK and abroad".
The FSA stopped short of calling for Mr Thiam's dismissal, by ruling that it "made no finding of lack of fitness and propriety" and that the breach of the rules was not intentional.
However, it dismissed Mr Thiam's claim that he was not personally culpable and that the case against him was "unwarranted".
Pirc told its shareholders: "That failed deal in itself would raise serious concerns about judgment of the CEO and the board. However, the regulatory breaches take those concerns to another level.
"The regulatory breaches relate to matters involving the CEO himself in a meeting where the information should have been but was not disclosed, and involving Prudential failing to follow the advice of the company sponsor to disclose the proposed acquisition to the UKLA at an early stage."
It concludes: "In Pirc's opinion, any doubt about the suitability of Mr Thiam to continue in office as a result of the decision to acquire, were then reinforced by the regulatory breaches."
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article