PRUDENTIAL PLC chairman Harvey McGrath has defended the British insurer’s failed $35.5 billion (€29.68 billion) takeover of AIA Group after investors called for him and chief executive officer Tidjane Thiam to quit.

Prudential is “convinced” the attempted purchase of AIA was the right strategy and that it was “in the best interests of investors”, the chairman told shareholders at the company’s annual general meeting in London yesterday.

Mr McGrath apologised for the costs of the failed bid, calling them “affordable”. He and Mr Thiam are trying to show shareholders they have a plan to expand in Asia after the acquisition failed amid disagreements with investors, the UK regulator and AIA’s parent, American International Group.

Mr Thiam (47) has already apologised to investors for spending £450 million (€546 million) in fees on the deal, and Prudential yesterday ruled out making another attempt to acquire AIA.

“We want a couple of heads to roll,” shareholder Paul Ferro said. “There’s been a huge amount of mismanagement. We could have had a year’s extra dividend for all that’s been wasted.”

The insurer’s revenue in the first five months of the year grew 27 per cent to £1.36 billion, compared to the same period in 2009, as policy sales in Asia rose 33 per cent, Prudential said separately in a statement. The company’s Asian unit had its highest rate of sales growth on record in April and May, up 38 per cent from 2009.

Mr Thiam said in a June 4th interview that his main priority in Asia would be to hire more agents in the region. Prudential is in “extremely good shape”, the chairman said. It had no doubt it would grow without AIA, he said.

Prudential dropped 22 pence, or 4 per cent, to 534 pence in London, valuing the firm at about £13.6 billion. The FTSE 100 index of top UK firms fell 1.1 per cent to 5069.06 points.

John Rider, a shareholder from Enfield, England, said at the meeting the board had to take responsibility for the failed acquisition. “The management has performed abysmally. A lot of money has gone to waste. I’m very relieved the deal didn’t go ahead.”

Mr Thiam has sought to justify the AIA acquisition by saying the deal would have accelerated his plan to expand in Asia. Prudential would have become the biggest life insurer in Hong Kong, Malaysia, Thailand, the Philippines and Vietnam had the deal been completed. – (Bloomberg)