KUALA LUMPUR (Dec 18): RHB Bank Bhd has filed an appeal against the High Court's ruling last month that Tokio Marine Life Insurance Malaysia Bhd's right to first refusal, under the bank's 10-year bancassurance arrangement with the bank, is still in effect until the expiry of the agreement on Dec 31, 2024.
In a statement to the stock exchange on Wednesday, RHB Bank said it has fully complied with the High Court's decision that was delivered on Nov 20, without prejudice to its right to appeal the case.
"The appeal was filed within the prescribed time limit of 30 days from the date of the High Court's decision in order to preserve RHB Bank's rights, pending clarification on Tokio Marine's response to the bancassurance terms offered by the best bid," the bank said.
RHB Bank assured that the appeal is not expected to have any material impact on its financial performance or operational activities.
The court's ruling, delivered on Nov 20, effectively means that Tokio Marine still has the right to be given the first opportunity to match the best bid RHB receives from other interested bancassurance partners to continue their existing partnership.
The court order also mandates that RHB Bank inform Tokio Marine within seven days of receiving any best bid. Subsequently, Tokio Marine has 14 days to confirm whether it will match the bid. During this period, RHB Bank is prohibited from entering into any bancassurance agreements with other parties.
The dispute between RHB Bank and Tokio Marine stemmed from a lawsuit filed by the insurer in September to enforce its right of first refusal under the 10-year bancassurance agreement between them. RHB Bank argued that Tokio Marine had already exercised its right of first refusal by rejecting an offer from the bank.
RHB Bank further contended that it had provided Tokio Marine with the opportunity to submit a bid and a subsequent revised bid to match the terms offered by competing bidders.
It has been reported since last year that RHB Bank has been exploring alternative bancassurance partners in anticipation of the agreement's expiration with Tokio Marine.
Additionally, Tokio Marine's parent company is also considering the sale of its Southeast Asian life insurance business, which includes operations in Indonesia, Malaysia, Singapore, and Thailand, with an estimated value of up to US$1 billion (RM4.46 billion).
In October, Reuters reported, citing sources, that Tokio Marine's parent company had temporarily halted the sale process, which had attracted interest from both Japanese and Middle Eastern buyers, due to the ongoing dispute with RHB Bank.
RHB Bank shares closed at RM6.48 on Wednesday, up two sen or 0.31%, giving the bank a market capitalisation of RM28.25 billion.