Neptune founder Robin Geffen has issued a warning over Prudential’s potential head office move from London to Hong Kong, saying it could raise questions about the future of its asset management arm M&G.
Geffen, who is one of the group’s institutional shareholders, claimed that Prudential’s move would raise concerns about the company’s “financial health” as well as reminding people of its failed attempt to acquire AIG’s Asian arm for £24bn in 2010.
Earlier this week Prudential confirmed that it was considering switching the domicile of its headquarters in a bid to respond tough Solvency II rules being introduced in January 2013.
Speaking to The Scotsman, Geffen said: “If this is a way of the group avoiding European solvency ratios, then investors would have every right to be worried.
“If Prudential wants to head offshore in search of less stringent solvency rules then it would raise serious questions about the fundamental health of the business.
“They [the Pru] need to be very careful about this. They have already tried to make a major, expensive Asian acquisition, which the shareholder base was not prepared to tolerate,” Geffen added.
“If this was a backdoor way of repeating this it would be doomed to failure. It would leave them [management] to answer questions of the future of the UK business, and M&G in particular.”
This is not the first time Geffen has spoken against Prudential’s plans. Neptune holds a significant stake in Prudential, estimated to be less than 3 per cent of the company’s share issue. In May 2010, Geffen launched an action group for shareholders to fight against Prudential’s proposed takeover of AIG’s Asian arm AIA.