PUTRAJAYA (June 23): Malaysia’s highest court on Monday threw out multinational insurer Prudential’s final bid to take full ownership of its local operations, slamming the door shut on a legal battle that spanned six years.
A three-member Federal Court panel led by Tan Sri Abang Iskandar Abang Hashim unanimously dismissed a review sought following ruling by an earlier bench, also at the Federal Court, that Detik Ria Sdn Bhd had no obligation to sell its 49% stake in Prudential Assurance Malaysia Bhd.
“In the circumstances, it is our respectful view that this is not a fit and proper case to review the earlier panel’s decision,” Abang Iskandar said. “In the upshot, the application for review is dismissed.”
Prudential, dual-headquartered in London and Hong Kong, filed for the review in April following release of the written grounds, while Detik Ria also filed their restitution (dividends) claim before the Kuala Lumpur High Court.
Besides retaining its equity interests, the apex court decision in July last year also ruled to restore all the benefits to Detik Ria from the void agreements, including dividends, if any, while any dispute over the benefits may be resolved further in the High Court.
Detik Ria’s 49% stake in Prudential Malaysia is held through Sri Han Suria Sdn Bhd. The remaining 50.99% in Prudential Malaysia, which mainly provides life insurance, is held by Prudential and 0.01% is held by PCA IP Services Ltd
On Monday, the panel that also consisted of Federal Court judges Datuk Nordin Hassan and Datuk Vazeer Alam Mydin Meera ruled that it was within the powers of the apex court earlier bench to look into other matters besides those raised from the questions of law posed.
In the review, Prudential raised issues of procedural illegality and denial of justice over the July 2024 decision, claiming that the previous bench had gone beyond the scope of the questions posed and had considered a matter that was originally dropped by Detik Ria.
Prudential counsels were led by Datuk Dr Cyrus Das and Datuk Bastian Vendargon.
Detik Ria — represented by Tan Sri Tommy Thomas, Tey Jun Ren, Mervyn Lai and Chuar Kia Lin — replied that the apex court bench was entitled to pose further questions outside the questions agreed upon as parties were also allowed to submit on the issues posed.
“The review is without merit and there is no foundation in law for them to pass the threshold of Rules 137 of the Federal Court rules,” Thomas added.
No procedural unfairness and parties allowed to submit
Abang Iskandar, who is also the Court of Appeal president, noted that the earlier apex bench had invited submissions from both parties four months after the first hearing of the appeal in March last year.
There is no procedural unfairness as each party was given the opportunity to address the issues asked by the apex court judges empowered to do so, he said in reading out the decision.
The court is entitled to move for remedy for restitution, which is “still a live issue before the High Court,” he said. “We are always reminded under Rule 137 of the Federal Court Rules there need to be finality in court cases and the powers to grant a review of cases is to be used sparingly.”
The bench also ordered Prudential to pay costs of RM100,000 to Detik Ria.
Detik Ria is jointly owned by 10 entities, each holding a 10% stake, according to a check on Companies Commission of Malaysia. They are: Berjaya Capital Bhd (a 100%-owned unit of Berjaya Corp Bhd (KL:BJCORP) as at Oct 2, 2023), Ekuiti Spektrum Sdn Bhd, Seahouse Capital Sdn Bhd, Antara Merdeka Sdn Bhd, Pentas Sentral Sdn Bhd, Arah Juara Sdn Bhd, Cangkat Selasih Sdn Bhd, Persada Majestik Sdn Bhd, Serata Setia Sdn Bhd and Gabungan Majestik Sdn Bhd.
When the matter first entered court in 2019, Detik Ria was at the time equally owned by Tan Sri Abdul Rahim Din and Tunku Datuk Seri Shahabuddin Tunku Besar Burhanuddin, The Edge reported based on information obtained from a company search.
The High Court in its decision in 2020, which was upheld by the Court of Appeal in 2022, ruled that there was nothing wrong in the enforcement of two put and call options agreements entered into by Prudential and Detik Ria, which would have allowed the disputed 49% stake to be passed to Prudential.
In the July 2024 decision, Tan Sri Nalini Pathmanathan, Datuk Seri Hasnah Mohamed Hashim (before becoming Chief Judge of Malaya) and Tan Sri Harmindar Singh Dhaliwal (who has since retired) ruled that section 67 of the now-repealed Insurance Act 1996 was breached when the agreements signed by the companies in 2002 and 2009 were carried out without the finance minister's approval.
“The court below erred in its decision that recognised the agreements despite such agreements being carried out without the minister's approval under Section 67 of the Insurance Act 1996. It erred in relying on the approval from Bank Negara Malaysia (BNM),” Nalini said in her oral decision.
Following the decision, the July bench also ruled that Prudential is required to return any benefits received under the two agreements, which includes the dividends paid out from Sri Han Suria, if any, and for Detik Ria to return a sum in excess of RM109.205 million, being the part payments for its 49% stake in Sri Han Suria, with 5% interest running from September 2019.