David Prosser: New Prudential boss seems accident prone


Outlook Tidjane Thiam knows a thing or two about coups, having been ousted from a ministerial post in the Ivory Coast government in 1999 by just such a rebellion. If he's not careful, he might find himself on the end of a similar plot courtesy of Prudential shareholders. A man whose intellect and talents were trumpeted from the rooftops on his appointment last year is rapidly beginning to look accident prone.

The Pru's investors were less than impressed with the way news of Pru's transformational deal to buy AIA dribbled out in March and scepticism about the deal remains. Not only will it leave Pru exposed to what have traditionally been higher-risk markets, but also, the Asian business will be capital-hungry rather than cash-generative like the UK, which may yet have to be sold.

To add insult to injury, Mr Thiam was last month forced into an embarrassing personal U-turn: he had wanted to join French bank Société Générale as a non-executive director but had to turn down the role after Pru shareholders understandably expressed their concern about not getting his full attention during the middle of the AIA deal and only six months after becoming chief executive.

Now it seems Mr Thiam has misread the signals coming out of the Financial Services Authority. In the aftermath of the financial crisis, when regulators were so heavily criticised for letting their charges over-commit themselves – in the Pru context, Royal Bank of Scotland's purchase of ABN Amro will have been to the forefront of the FSA's thinking – the City watchdog was always going to take a long hard look at this deal. Yet Pru seems to have thought it could press on with its preferred timetable regardless of the FSA's concerns.

To be charitable – and only six months into a new job, Mr Thiam deserves to be given a chance to prove himself – these mistakes have been errors of judgement rather than evidence of grave strategic failure. Still, if the AIA deal were to collapse, it would be tough for Mr Thiam to stay in his job. Time to put the teething errors behind him.

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