ADVISERS to Prudential’s failed $35bn (£21.5bn) bid for AIA last year are being probed by the City regulator over
concerns about the standards of their work on the deal.
Prudential was ordered by the Financial Services Authority to start an investigation into whether the three banks advising it on the takeover, which involved plans for a $20bn rights issue, had met the correct standards, a source confirmed to City A.M. last night.
City A.M. understands that the inquiry, which focuses on advisers Credit Suisse, HSBC and JPMorgan and not the insurer itself, was a consequence of the size and profile of the failed deal.
Law firm Clifford Chance is producing the report for Prudential.
The FSA can order a Section 166 report, known as skilled persons reports, wherever it feels companies did not give appropriate advice or provide adequate systems and controls. They do not necessarily result in enforcement action but can lead to recommendations for change.
The three banks entered the deal at different stages of the bid for Asian insurer AIA, with Credit Suisse advising the early negotiations and JP Morgan hired as the deal progressed. HSBC advised the later stages ahead of the deal’s announcement.