Thursday, May 28, 2015

Response from Rev. Jesse L. Jackson Sr., founder and president of the Rainbow PUSH Coalition, regarding the IPO of AIA, a unit of American International Group (AIG).

CHICAGO--The Rainbow PUSH Coalition consistently advocates for full and equal minority participation in national financial transactions, especially those in which the United States government is a direct participant.

Unfortunately, leaders of the initial public offering of AIA Group Ltd. (AIA), the pan-Asian life insurance business of the American International Group, Inc. (AIG), have selected as lead underwriters from the same large firms that led the world to the brink of economic collapse and received billions in taxpayer bailout funds to stabilize their firms--Citigroup Inc., Goldman Sachs Group Inc., Morgan Stanley, Deutsche Bank AG, Merrill Lynch, Credit Suisse Group, UBS AG, Chinese bank ICBC International Holdings Ltd. Barclays Capital, J.P. Morgan Chase & Co.; Malaysian financial-services firm CIMB Group.

On September 29, 2010, Rainbow PUSH wrote to Secretary Geithner, the New York Federal Reserve Chairman; William Dudley, president and chief executive officer of the Federal Reserve Bank of New York and; Bob Benmosche, chief executive officer of AIG, regarding AIG's planned initial public offering of AIA.

AIG is the recipient of more than $95 billion from the federal government including more than $50 billion of TARP funds and $45 billion of support from the New York Federal Reserve Bank. AIG and the U.S. Treasury have reached an agreement under which the U.S. Treasury will own shares of AIG representing more than 92% of the Company in exchange for the financial support that both the U.S. Treasury and the New York Federal Reserve have provided. As such, Rainbow PUSH argued that minority firms should have significant and meaningful participation in the AIA IPO.

It has been reported in the press that IPO of AIA will likely value the unit between $28.5 billion and $30.5 billion, and could raise more than $15 billion in cash to repay U.S. taxpayers. Unfortunately, minority investment firms have been virtually shut out of the process, reportedly receiving less than one-tenth of 1% of the expected fees for handling the IPO. This is appallingly unfair, and runs contrary to the principles of inclusion and minority participation
Our advocacy for minority participation is bolstered by recent initiatives - specifically the inclusion of Section 107B of the Emergency Economic Stabilization Act regarding inclusion of minority and women owned firms in TARP related activity (i.e., asset dispositions) to the maximum extent possible; and Section 342 of the Dodd-Frank Wall Street Reform and Protection Act ensuring that minority and women-owned businesses are fairly included to the maximum extent possible in all types of contracts.

The lack of any meaningful participation by minority-owned investment banking firms in the AIA IPO is unacceptable, and we will challenge the decision makers to enforce the aforementioned legislative and regulatory provisions in the AIA IPO process. Rainbow PUSH will be communicating with them, and will seek Congressional hearings on the matter.

Category: National

Click to

Events Calendar

Sat May 30 9:00AM -
Afrikan Mental Liberation Weekend
Sat May 30 11:30AM -
Black Mother: Standing in the Gap
Sun May 31 9:00AM -
Afrikan Mental Liberation Weekend
Sat Jun 6 11:00AM - 5:00PM
21st Annual Gilmore Heritage Auto Show
Tue Jul 14 5:00PM - 9:00PM
Taste of Farmers Market
Sun Aug 2 12:00PM - 3:00PM
L.A. Parent 35th Birthday Bash