KUALA LUMPUR (Nov 20): The Kuala Lumpur High Court has ruled that a bancassurance agreement between Tokio Marine Life Insurance Malaysia Bhd and RHB Bank Bhd (KL:RHBBANK) is still intact till it expires on Dec 31, 2024.
It also ordered that RHB must inform Tokio Marine of any best bid it receives within seven days, while Tokio Marine has to confirm within 14 days if it will match it.
RHB is barred from entering into any bancassurance agreement with any party pending the above.
This came after the court ruled on Wednesday that Tokio Marine’s right to first refusal under the insurer’s 10-year bancassurance arrangement agreement with RHB is still in effect. In other words, Tokio Marine still has the first opportunity to match the best bid RHB receives from other interested bancassurance bidders to continue its bancassurance deal with the bank.
“The orders granted are not expected to have any financial impact to RHB,” the bank said in a bourse filing on Wednesday.
“RHB is only required to provide Tokio Marine with the opportunity to match the bancassurance terms offered by the best bid,” it added. Previously, RHB contended that Tokio Marine had already exercised its right of first refusal, saying the bank had made an offer to the insurer which was refused.
Tokio Marine in September filed a lawsuit against RHB to enforce its right of first refusal over the 10-year bancassurance agreement, according to a bourse filing by RHB. Tokio also asked RHB for details of the bid RHB had agreed to accept from other parties for a new agreement, and applied for an interim injunction to prevent RHB from finalising a deal with other parties.
RHB contended that Tokio Marine had already exercised its right of first refusal, saying the bank had made an offer to the insurer, which was rejected. The bank also claimed it had given Tokio Marine the opportunity to submit its bid and a further revised bid to match terms offered by other bidders.
There have been reports since last year that RHB Bank was looking for a new bancassurance partner, in anticipation of the end of its current agreement with Tokio Marine.
On top of that, Tokio Marine’s parent company is said to be eyeing a sale of its Southeast Asia life insurance business — a deal that reports said could fetch US$1 billion. The sale would include its life insurance businesses in Indonesia, Malaysia, Singapore and Thailand.
In October, Reuters reported, citing sources, that Tokio Marine's parent had paused the sale that had attracted interest from Japanese and Middle Eastern buyers, due to this dispute.
Shares in RHB ended one sen or 0.15% higher at RM6.50, valuing the bank at RM28.34 billion.
*This article has been updated for clarity.