• AC is more public than SMC


    SOME listed companies show in their public ownership reports (POR) that they are more public than others. Others simply report their compliance with the 10-percent-minium public ownership rule by listing their majority and significant stockholders.

    The main problem lies in the identities of significant stockholders, particularly those that are registered or incorporated somewhere else. Their addresses in other countries make them beyond the scrutiny of the Securities and Exchange Commission and the Philippine Stock Exchange.

    To show how listed companies fill up the POR forms, Due Diligencer is reviewing the ownership profiles of Ayala Corp. and San Miguel Corp. based on their filings as of Dec. 31, 2015 posted on the PSE website. The entries reflect the ownership profiles that ALL listed companies should show in their filings. The public will not mind at all even if not all outstanding common shares are listed.

    The common shares of both AC and SMC are listed, although being listed does not necessarily make them public.

    Mermac unit
    AC has 619.611 million outstanding common shares owned by two kinds of stockholders. The majority and significant stockholders, along with individual insiders, belong to one class and hold a total of 370.449 million or 59.79 percent. The public own 249.162 million shares or 40.21 percent.

    In a public ownership report, AC, which is the holding company of the Zobel family, listed two significant stockholders with combined holdings of 366.767 million common shares or 59.19 percent. Of the 366.767 million common shares, Mermac Inc. and Mitsubishi Corp. of Japan hold 303.689 million or 49.01 percent and 63.078 million or 10.18 percent, respectively.

    AC is the only subsidiary of Mermac, the unlisted holding company of the Zobel family.

    On the other hand, SMC has issued a total of 3.283 billion common shares of which 2.378 billion remained outstanding as of Dec. 31, 2015. (As of Feb. 5, SMC had the same number of issued common shares which was 3.283 billion, but had 2.379 billion outstanding common shares. The discrepancies would be in the number of treasury shares – 907.753 million as of Dec. 31, 2015 and 904.753 million as of Feb. 5.)

    More public
    Like AC, San Miguel also listed two stockholders. Unlike Ayala, SMC has a majority stockholder and a significant stockholder with a combined ownership of 1.947 billion common shares or 81.83 percent. Top Frontier Investment Holdings Inc. owns 1.573 billion common shares or 66.13 percent, while Privado Holdings Corp. holds 373.634 million common shares or 15.7 percent.

    Minus the SMC common shares held by Top Frontier and Privado, the public are left with 356.475 million or 14.99 percent.

    If the public would look more closely at the discrepancies between the public ownerships reported by the two listed companies, they may easily note the discrepancy. The question that may be asked is: How such a discrepancy happened or was allowed to happen?

    The public need not look farther from www.edge.pse.com to find the answer. It only takes a more meticulous deciphering to understand how AC and SMC have been using the PSE’S website in informing the public about their old ownership profiles and the changes that occur from time to time.

    AC attributed to the public the ownership of common shares by company insiders, including those who bought shares under the stock option plan. SMC did not. Instead, it left unclassified, but excluded from the majority holdings, 43.445 million locked up shares; 22.269 million held by insiders; and 330,831 held by various banks.

    Despite the “exclusion,” SMC remains compliant with the 10-percent-minimum public ownership rule that governs listed companies.

    Dividend policy
    PEPSI-COLA Products Philippines Inc. shares with its stockholders “up to 50 percent of its preceding year’s annual net income,” a policy that it said “may be subject to future revision.” As used in its filing, “future revision” strictly monitored by the Securities and Exchange Commission should mean the company may increase its cash dividend but may not reduce the equivalent percentage.

    “The declaration and payment of cash dividends,” Pepsi-Cola, which uses PIP for market symbol, said, “are subject to approval by the board without any further need for stockholders’ approval.” On the other hand, are the declaration and payment of stock.

    While Pepsi-Cola applies the same 50-percent of previous year’s net income policy on stock dividend, it said “the declaration of stock dividends requires the further approval of the stockholders representing no less than two-thirds (2/3) of the Corporation’s outstanding capital stock.”



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