KUALA LUMPUR: Bank Negara Malaysia expects foreign insurers to honour their commitments to rationalise their stakes in their local units, adding this was not a new directive or new foreign ownership rule.
The central bank said on Thursday the rationalisation of the stake related to specific commitments given by the foreign insurers concerned when they applied for entry into the Malaysian insurance market.
“The Bank expects foreign insurers to honour these commitments,” it said.
Bank Negara was clarifying a Reuters’ article entitled “Prudential Malaysia unit in talks with KWAP to sell 30% stake”.
“It is not a recent directive by Bank Negara or a new foreign ownership rule as implied in the article,” it said.
The Reuters report, with a London dateline, said on Wednesday that Prudential PLC was in advanced talks with Malaysian pension fund Kumpulan Wang Persaraan (KWAP) to sell a minority stake in its Malaysia subsidiary in order to comply with foreign ownership rules.
The report also stated the FTSE 100-listed insurer and asset manager was looking to sell a 30% stake in its wholly-owned Prudential Assurance Malaysia Berhad unit to KWAP for around US$435mil (RM1.69bil), Reuters reported citing sources familiar with the matter.
The report also sated foreign insurers were looking to cut their stakes in local units to 30% following a directive by Bank Negara which looks to increase local participation in the insurance market. Reuters reported the talks were not exclusive between KWAP and Prudential.