City veteran Manduca to chair the Pru

Prudential has confirmed that one of the oldest hands in the City is to become its new chairman, a move aimed at placating investors angry at the botched, $35bn (£28bn) bid for the Asian insurer AIA two years ago.

Paul Manduca, already on the board and originally hired to lead the search to find a replacement for Harvey McGrath, will take a salary of £600,000 a year for the part-time, though demanding, job. He is expected to scale back his other non-executive duties, and will quit his role as chairman of the insurance broker Aon UK "as soon as possible".

Mr McGrath is carrying the can for the failed AIA bid, an ambitious tilt in the midst of a financial crisis that made shareholders uneasy and left them with a bill for £377m.

Mr Manduca, left, will assume the role of chairman on 2 July. He headed Deutsche Bank's European asset management from 2002 to 2005.

He held senior roles at Rothschild Asset Management, Eagle Star and Allied Dunbar from 1994 to 1999

The company will appoint a replacement senior independent director in due course, it added.