Are Filipinos still in control of MPIC board?
Emeterio Sd. Perez
THE Securities and Exchange Commission (SEC) and the Philippine Stock Exchange (PSE) may want to change the system of scrutinizing the ownership of listed companies. Instead of relying on the ownership of the number of common and voting preferred shares, they could, if they wanted to, scrutinize the composition of the boards for them to know the nominees of the majority owners and those of the public stockholders, if any.
The suggestion is not meant to accuse listed companies that are not necessarily public of cheating the SEC and PSE thru their ownership postings. If regulatory authorities are after the best interest of the public, their closer study of individual directors would expose who among them are the nominees of stockholders.
As a matter of fact, SEC officials and PSE managers may choose to revisit the board if their interest is to justify the claim of listed companies that their public stockholders are at the same time significant or principal stockholders.
For example, the public stockholders of Metro Pacific Investments Corp. (MPIC) owned 13.312 billion MPIC common shares, which were equivalent to 42.245 percent of 31.513 billion outstanding common shares as of June 30, 2018, according to a public ownership report (POR).
Directors’ holdings
The same POR listed MPIC’s two principal/significant stockholders such as Metro Pacific Holdings Inc. and GT Capital Holdings Inc., which owned 13.223 billion MPIC common shares, or 41.93 percent, and 4.9 billion MPIC common shares, or 15.47 percent.
As MPIC’s POR showed, the company’s 15 directors, who were paid P2.9 million in 2017, owned 76.993 million common shares, or 0.24 percent. As chairman of the board, Manuel V. Pangilinan was listed as owner of 6.75 million common shares, or 0.02 percent.
The regular directors and their individual MPIC holdings are as follows: Jose Ma. K. Lim, 20.5 million common shares, or 0.07 percent; Rodrigo E. Franco, one common share; Augusto P. Palisoc Jr., 10 million common shares, or 0.03 percent; Albert F. Del Rosario, 14.224 million common shares, or 0.05 percent; Francisco C. Sebastian, 100 common shares; Ray C. Espinosa, five million common shares, or 0.02 percent; Robert C. Nicholson, one common share; Ramoncito S. Fernandez, 7.698 million common shares, or 0.02 percent; David J. Nichol, 9.25 million common shares, or 0.03 percent;
The same POR posted by MPIC on PSE website listed the independent directors as follows: Alfred V. Ty, one common share; Edward S. Go, 1 million common shares; Artemio V. Panganiban, 1.541 million common shares; Lydia B. Echauz, 1.03 million common shares; and Jose Jesus G. Laurel, 100 common shares.
(Note: The PSE website lists Washington Z. Sycip as one of MPIC’s five independent directors. He died in 2017.)
Due Diligencer’s take
The computation in POR of public ownership of listed companies is based only on common shares. On the other hand, a GIS shows all classes of shares issued by listed companies.
While common shares are deemed voting, preferred shares are classified into either voting or non-voting capital stock. The distinction should have awakened the ownership monitoring teams of regulatory authorities into reviewing regularly ownership disclosures to determine if, as the law requires, Filipinos remain in control of at least 60 percent of outstanding voting capital stock.
As a rule, foreigners are allowed only to own a maximum of 40 percent of common shares. It’s up to the SEC and PSE to see to it that 60-40-percent ownership ratio is strictly followed. Who owns what should be the basic poser that would enable regulators to determine if the law on ownership is followed to the letter.
Again, it’s up to the SEC to study the board memberships of listed companies for its officials to find out who nominate directors during annual stockholders’ meeting.
Perhaps, the ruling issued a few years ago by the Supreme Court in the case of Philippine Long Distance Telephone Co., which been renamed PLDT Inc., should be imposed on listed companies.
If the SC decision is to be followed, would anyone among the 300 or so listed companies qualify to remain listed if each class of shares should be at least 60 percent owned by Filipinos? Just asking.
esdperez@gmail.com
The post Are Filipinos still in control of MPIC board? appeared first on The Manila Times Online.