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Chairman approved share deal

The chairman of Prudential, Sir Brian Corby, was the director who authorised the share dealings that contributed to Mick Newmarch's abrupt departure from Britain's biggest insurer.

The Pru continued to insist yesterday that neither it nor Mr Newmarch had broken the rules of by the Stock Exchange regarding dealings by directors.

The exchange is investigating the sale by Mr Newmarch of just over 200,000 shares in the Pru hours before the Securities and Investments Board published a critical report on the personal pensions industry and the day before the Pru released new business figures showing a sharp decline in UK sales.

Officials from the exchange's surveillance unit contacted the company shortly after the sale, which took place on 25 October.

The company says Mr Newmarch followed the procedure laid down by the Pru, which follows closely the exchange's model code in its listing rules.

The company says Mr Newmarch contacted the company secretary's office on the morning of 25 October, seeking approval for the deal. That day was the last on which he could exercise the options in question.

The company secretary's office was responsible for checking the rules would not be breached and seeking the authorisation of an appropriate director - in the case of the chief executive, the chairman.

The company argues that Mr Newmarch's dealing did not breach the rules because the SIB report and the new business figures were not price-sensitive.

The Stock Exchange's model code states: "A director must not deal in any securities of the listed company during a close period, which is defined as the period of two months immediately proceeding the announcement of interim and annual results, or a month preceeding quarterly results." The rule on price-sensitive information states: "A director must not deal in any securities of the listed company at any time when he is in possession of unpublished price-sensitive information in relation to those securi ties."