23 Apr 2004

PT Prudential Life Assurance to appeal Indonesian Court decision

PT Prudential Life Assurance recently terminated a consultancy contract for agency sales force management, following legal advice. As a result, the consultant has made a claim against PT Prudential Life Assurance for approximately US$ 40 million and has filed a bankruptcy petition in the Jakarta Bankruptcy Court. The Company considers, on the basis of its legal advice, that the bankruptcy petition is misconceived.

Jakarta's Bankruptcy Court returned its verdict today. It held that the Company owes the consultant approximately US$ 400,000 and as a result, has put the Company into bankruptcy. PT Prudential Life Assurance is very surprised that the Court has decided to accept the petition filed against it. PT Prudential Life Assurance plans to vigorously appeal the Jakarta Bankruptcy Court's decision.

While the appeal process is underway, Prudential' s operations in Indonesia intend to continue business as usual. All Prudential policies remain completely unaffected and our total commitment to our customers and our employees continues undiminished.

PT Prudential Life Assurance is financially very strong. Its Risk Based Capital (RBC) ratio of 255% (as at December 31, 2003) compares very favourably with the 100% requirement dictated by the Ministry of Finance.

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Prudential plc is an international company incorporated in the United Kingdom, and its affiliated companies constitute one of the world’s leading financial services groups. It provides insurance and financial services directly and through its subsidiaries and affiliates throughout the world, and it has been in existence for over 170 years. Prudential plc is not affiliated in any manner with Prudential Financial, Inc, a company whose principal place of business is in the United States of America, or the Prudential Assurance Company, a subsidiary of M&G plc (a company incorporated in the United Kingdom).