Business
Update on consolidation of ownership in Malaysia
Update on consolidation of ownership in Malaysia.
About this update from Prudential Plc
[{"type":"text","content":"\n\nThis announcement contains inside information.\nUpdate on consolidation of Prudential's ownership interest in Prudential Assurance Malaysia Berhad (\"PAMB\").\nToday Prudential plc (\"Prudential\") has provided an update on its ownership interest in PAMB, which is Prudential's conventional life insurance business in Malaysia and forms part of its Malaysian life insurance segment.\nPrudential holds a 51 per cent stake in Sri Han Suria Sdn Bhd (\"SHS\"), the holding company of PAMB. Detik Ria Sdn Bhd (\"Detik Ria\") holds the other 49 per cent. There was an agreement between Prudential and Detik Ria which allowed Prudential to acquire from Detik Ria their 49 per cent shareholding in SHS under a put option arrangement. In 2008, the put option was exercised by Detik Ria for which it received payments for the shares over a 10 year period in accordance with the agreement. When Detik Ria failed to complete the share transfer in 2019, Prudential had to file a legal action against Detik Ria with the Kuala Lumpur High Court to enforce its rights. Subsequent decisions by the High Court and the Court of Appeal were both made in favour of Prudential in confirming the contractual rights of Prudential to increase its shareholding in SHS to 100 per cent. Following a further appeal made by Detik Ria, the Federal Court of Malaysia has today overturned the previous rulings of the High Court and the Court of Appeal. \nPrudential currently holds a 51 per cent shareholding in SHS, and its economic interest in PAMB was consolidated at 100 per cent in its Annual Report and Accounts for the year ended 31 December 2023.\nTo reflect this Federal Court decision, Prudential will continue to consolidate the business of PAMB, which remains a subsidiary controlled by the Prudential Group, but will now reflect a 49% non-controlling interest in its group financial statements for the minority shareholding of Detik Ria. In line with the Prudential Group's policy, operating metrics will continue to be shown before the effect of minority interests.\nThe change in accounting treatment of Prudential's ownership interest in PAMB will be reflected in the Prudential Group's HY24 financial reporting. If it had been applied as at 31 December 2023, IFRS and EEV shareholders' equity would have been reduced by marginally less than 5% and marginally less than 4%, resp...