Prudential Settles Malaysian Share Dispute, Boosts Local Stake

Insurance Giant to Increase Ownership in PAMB Amid Legal Truce

British insurer Prudential has agreed to an out-of-court settlement, concluding a protracted shareholding dispute with its Malaysian partners, including businessman Vincent Tan Chee Yioun and members of the Johor royal family.

Prudential to Acquire Additional Stake

Under the terms of a multi-million dollar agreement, Prudential is set to acquire an extra 19% equity in Prudential Assurance Malaysia Berhad (PAMB) from Detik Ria, a Malaysian company led by Vincent Tan. This move will raise Prudential’s ownership in PAMB from 51% to the maximum allowable 70% for foreign entities.

The proposed transaction awaits regulatory clearance from Malaysian authorities, including the Ministry of Finance and Bank Negara Malaysia.

Years-Long Legal Battle Ends

Prudential and Detik Ria have been embroiled in legal proceedings since 2019. The dispute centered on PAMB shareholdings and recently extended to dividend payments. Detik Ria intends to exit its remaining 30% stake in PAMB following the settlement, with talks already underway with local institutional investors.

Sources indicate the total settlement value could exceed RM850 million (US$201 million) for Tan and his associates, resolving all outstanding litigation and joint venture matters.

“This deal will end all litigation and both parties have resolved all matters to the joint venture.”

—A senior financial executive close to Berjaya’s Tan

Dividend Dispute Also Resolved

The settlement also covers a recent lawsuit filed by Detik Ria seeking US$833 million over disputed dividend payments. Prudential announced last Thursday it would pay US$83 million to Detik Ria and waive a US$33 million debt. Prudential stated this constitutes a “full and final” resolution to the Malaysian firm’s legal action.

Prudential has indicated that the settlement does not impact its control over PAMB’s operations or its customer service commitments.

Complex Legal History

The dispute originated in 2018 when Detik Ria attempted to rescind a 2008 agreement to sell its entire PAMB interest to Prudential, despite having already received RM109 million of the RM114 million sale price. Prudential’s lawsuit aimed to enforce this agreement. While Prudential initially secured favourable judgments, Malaysia’s Federal Court ruled in July 2024 that the agreement required Ministry of Finance approval.

Further attempts by Prudential to gain full ownership were rejected by the Federal Court in June. Despite the substantial legal wrangling, the precise reasons for Detik Ria accepting a fraction of its dividend claim remain unclear.

The insurance sector in Malaysia continues to grow, with total assets of the insurance industry reaching approximately RM247 billion (US$53 billion) as of the end of 2023 (Insurance Services Malaysia, 2023).