KUALA LUMPUR, Aug 7 — British insurer Prudential has reached an out-of-court settlement with its Malaysian partners, led by businessman Tan Sri Vincent Tan and members of Johor’s royal family, over a long-running shareholding dispute.
The agreement allows Prudential to acquire an additional 19 per cent stake in Prudential Assurance Malaysia Berhad (PAMB) from Detik Ria, a company controlled by Tan, Singapore’s CNA reported.
This acquisition, which still requires regulatory approval from the Ministry of Finance and Bank Negara Malaysia, would raise Prudential’s stake in PAMB to 70 per cent.
Detik Ria, which will retain 30 per cent of PAMB after the deal, has started talks with local institutional investors in a bid to sell off its remaining interest.
Sources familiar with the matter told CNA that the total value of the proposed deal and settlement may exceed RM850 million.
“This deal will end all litigation and both parties have resolved all matters to the joint venture,” said a senior financial executive close to Tan.
Prudential and Detik Ria have been embroiled in legal disputes since 2019 over shareholding and dividend payment issues in their Malaysian joint venture.
Detik Ria had initially agreed in 2008 to sell its entire interest in PAMB to Prudential but later tried to rescind the deal in 2018 after receiving RM109 million out of the RM114 million agreed price.
Prudential responded by suing Detik Ria in Malaysia, where it won judgments in the High Court and Court of Appeal before the Federal Court overturned the decision in July 2024, citing a lack of Finance Ministry approval.
Prudential’s application for a review of the Federal Court ruling was dismissed in June, effectively halting its push for full ownership of PAMB through the courts.
Meanwhile, Detik Ria filed a suit in April seeking US$833 million (RM3.5 billion) in dividends, but last week both parties resolved the matter with Prudential agreeing to pay US$83 million and waive a US$33 million debt.
Prudential stated that this settlement was “full and final” and would not impact its control over PAMB’s operations or its service to customers.
The legal tussle had drawn attention due to its implications for foreign ownership rules and the complexities of joint ventures in Malaysia’s financial sector.
Prudential first entered the Malaysian market in 1924 and formalised a joint venture with Detik Ria in 2002 to comply with local shareholding policies under the New Economic Policy.
Detik Ria includes nine shareholders linked to Tan and counts among its major stakeholders Persada Majestik, a firm owned by Johor royalty.
The Prudential-Detik Ria arrangement, involving a holding company called Sri Han Suria, was structured to navigate Malaysia’s regulatory landscape, with Prudential holding 51 per cent and Detik Ria 49 per cent.
Malaysia’s insurance sector, forecast to grow to RM30.5 billion in direct premiums by 2028, has long been dominated by foreign players, many of whom face pressure to restructure shareholding to include local partners.
