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Pru’s Asian misadventure: a cautionary tale

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PRUDENTIAL/By Clara Ferreira-Marques

Prudential’s ill-fated Asian adventure has left the company and its management badly bruised. But it has offered at least two valuable lessons for ambitious executives tempted onto the acquisition path by post-crisis, “once-in-a-lifetime” deals.

Lesson one: It’s not 2007 any more, Toto.

Lesson two: Disregard shareholders at your peril.

On the first, bold mega-deals that once impressed the market now seem to mostly unsettle both investors and regulators.

Unease at the Financial Services Authority — and a need to tick every box — was responsible for the unprecedented and damaging last-minute delay to Pru’s offer details last month.

For that, Prudential can thank the financial crisis, but also Royal Bank of Scotland’s near-fatal role in the hubristic and record takeover of ABN Amro — despite shareholder misgivings and clear signs of an impending crisis.

from From Reuters.com:

How has the credit crisis affected you?

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The demise of Lehman Brothers a year ago sparked a collapse in financial market confidence and set of a series of reactions that have spread hardship into the four corners of the globe.

Reuters News has charted the key events and their impact in "Times of Crisis" -- a major new multimedia production on Reuters.com. (See it here.)

Is it enough to say sorry?

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lehman.jpgSorry seems to be the hardest word in many walks of life – but for hard-nosed bosses  of financial institutions it seems to be even tougher, even during the credit crunch.

A recent notable exception was Richard Fuld, CEO of collapsed Lehman Brothers, who told U.S. lawmakers earlier this month he took full responsibility for his actions and felt “horrible about what has happened to the company,” but insisted he shared the blame with regulators and Congress.

Schadenfreude – the new City currency?

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Is it me or is Schadenfreude on the march? In the midst of all the headlines about wealthy bankers facing the ‘new reality’ of unemployment and comment about them not being terribly worthy of sympathy on account of their vast past bonuses, it’s as well to remember that not everyone can be sanguine about being cast out of work and that every job lost is a potential human tragedy.

 When big employers like Lehman Brothers collapse and others shed vast numbers of staff, there will be numerous people who face severe difficulties. And that’s something that some of those who seem to be revelling in the bankers’ misfortune would do well to remember.

The wages of sin

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  ***For full coverage of the crisis click here***

British newspapers were united in their scathing condemnation of high finance now laid low and the failure of regulatory authorities to rein in what they see as the greed-fuelled excesses of the banking sector. 

Only Hank Paulson, the man who said “no” to a Lehman Bros bailout emerges with any credit in the eyes of the leader writers — along perhaps with legendary investor Warren Buffett who in 2002 condemned the derivatives that lie behind the current crash as “financial weapons of mass destruction”.

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