HDI Global SE, despite alleged violations, dominates PVI with 53.92 per cent stakes

HDI Global SE holds a majority stake in Vietnamese life insurer PVI

As VIR reported previously, the State Securities Commission (SSC) has fined HDI Global SE – a German investor which is the largest shareholder of Vietnamese non-life insurer PVI – for non-compliance with information disclosure and violating foreign ownership limit (FOL) rules.

In mid-August, HDI Global SE was allegedly fined for VND125 million ($5,430) for conducting one or several transactions to obscure company ownership and avoid information disclosure responsibilities. A fine of VND60 million ($2,600) was also imposed on the corporation for violating the FOL.

On the other hand, HDI Global SE now holds a majority stake in PVI with 53.92 per cent.

Specifically, on April 8, 2018, PVI confirmed that HDI Global SE purchased all PVI shares of Funderburk Lighthouse Ltd. (FLL), which owned 11.58 per cent.

Besides, PVcomBank – a commercial lender backed by PetroVietnam – previously divested its capital in PVI. HDI Global SE requested PVI to dismiss the representative of PVcomBank from the Board of Management, although the representative allegedly bore a great deal of responsibility and was legally bound to work to bring the best out of PVI.

Accordingly, PVI Board structure decreased from eight to seven members, including three representatives of PetroVietnam and four representatives directly and indirectly nominated by HDI (three representatives of HDI and one of FLL). This was contrary to HDI’s prior decision to keep eight board members during 2017-2019.

In March 2019, in a document sent to the prime minister of Vietnam, Jens Wohlthat, director of HDI, proposed to increase the number of board members at PVI from eight to nine.

Nguyen Anh Tuan, representative of PetroVietnam and chairman of the PVI Board, requested keeping key personnel on the board unchanged with eight members until PetroVietnam could successfully divest from PVI. The plan would have helped PetroVietnam to retain control over the PVI Board.

However, PetroVietnam later agreed to HDI's proposal to increase the number of board members from eight to nine.

On March 16, 2020, at PVI’s annual shareholders' meeting, PVI elected and replaced three members of the board, bringing total members to nine. In particular, four members are PVI representatives, while HDI and FLL representatives number five.

Jens Holger Wohlthat has been appointed as chair of the board for 2017-2022, effective since January 16, 2020.

Nguyen Xuan Hoa has been appointed as standing vice chairman of the board cum head of the Remuneration and HR Committee.

Duong Thanh Danh Francois, who is of French nationality, has become chairman of the Members’ Council of PVI Insurance on February 28, 2020. Francois is currently also director of the Asia-Pacific region (except Japan) of HDI Global SE.

So far, besides its 42.34 per cent stake, HDI allegedly indirectly owns 11.58 per cent through FLL, bringing its total interest to 53.92 per cent.

HDI Global SE is a subsidiary of Talanx – the third-largest German insurance group in terms of premium income and one of the largest in Europe.

HDI operates through foreign branches, subsidiaries, and affiliates, as well as network partners in more than 130 countries, offering international industrial insurance products.

Headquartered in Germany, the company generates more than half of its premium volumes abroad. In line with this international focus, the former HDI-Gerling Industrie Versicherung AG changed its name to HDI Global SE in 2016.