ALLIANCE Select Foods International Inc. is one listed company that the Securities and Exchange Commission (sec) has either forgotten to closely watch or simply has chosen not to watch for reason or reasons unknown to the public investors.
Had the SEC officials kept monitoring the financial performance of Alliance Select, they would have seen how the company incurred huge losses totalling $34,970,151, or P1,748,507,550, over the years. They could have even asked the company’s directors how a company could have lost so much in six years.
Of course, 2012 was rather the exception because Alliance Select reported net profit of $767,429, which, at today’s exchange rate of P50 per US dollar would amount to P38,371,450.
The annual filings posted on the website of Alliance Select showed scary net losses (at P50:$1) such as the following: $5,898,769, or P294,938,450 in 2016; $8,022,816, or P401,140,800 in 2015; and $17,076,504, or P853,825,200, in 2014; $2,918,933, or P1,333,453,400 in 2013; $1,053,129, or P52,656,450, in 2011.
As of December 31, 2016, Alliance Select showed in a financial filing a deficit of $26,669,068, or P1,333,453,400.
(Due Diligencer computed the numbers Alliance Select presented in the financial filings posted on its own website. Unfortunately, the computations arrived at a sum much higher than the company’s deficit reported in audited financial filings.)
As a listed company, Alliance Select proclaims itself as “a public corporation” under the definition of the Securities Regulation Code. If the company’s boast is correct, then it should have named the beneficial owners of 2,101,974,240 shares held as of March 31 by PCD Nominee Corp. in the list of top 100 stockholders.
Of the total number of Alliance Select shares held by PCD Nominee, 2,011,832,998 shares, or 80.483 percent, were attributed to Filipinos and 90,141,242 Alliance Select shares, or 3.606 percent, to foreigners.
Due Diligencer relied on other filings to find the majority stockholders of Alliance Select. The top 100 list of stockholders was not enough for public consumption.
Luckily, a definitive information statement (DIS) provided the answers. In it, Alliance Select identified Strongoak Inc. as the beneficial stockholder, as of March 31 of PCD-held Alliance Select shares.
“The 1,382,765,864 shares (55.32 percent) held by Strongoak Inc. through PCD Nominee, and the 622,875,496 shares (24.92 percent)…are shares beneficially owned by Filipinos,” Alliance Select said in a filing.
However, as the majority stockholder, Strongoak had two nominees in its seven-person board. They were, and still are, Antonio C. Pacis, who is the present chairman of the board, and Marie Grace T. Vera Cruz.
Due Diligencer’s take
A general information sheet (GIS) showed Strongoak’s authorized capital stock at one million shares with par value of P1. It listed Seawood Resources Inc. as the lone subscriber stockholder, owning 249,995 shares, worth P249,995. Six nominee incorporators held one share each, bringing the total subscribed capital stock to 250,000 shares, or P250,000.
Of the subscribed capital stock, P62,500 was paid up. This means Strongoak had only this much in investing in more than P1 billion worth of shares in Alliance Select.
Strongoak listed in its GIS the nominee incorporators, namely Marie Grace T. Vera Cruz, Dennis L. Ignacio, Gabriel A. Dee, Cherrylynn G. Prado-Caoile, and Charlie C. Yalung.
Registered with the SEC on May 2, 2014, Strongoak ended up as the majority stockholder of Alliance Select.
How did a company with so little paid-up capital become the majority stockholder in another company whose stockholders probably also own it?
The public investors were even credited in a public ownership report as owners of 794,213,279 Alliance Select shares, or 31.77 percent. If they really controlled more than 31 percent of Alliance Select’s voting shares, they should have been entitled to at least two seats in the seven-person board.
Of course, public investors are in the market to invest their extra money to earn a little more than what banks would have paid them for their savings accounts.
The continued silence of SEC officials on the fate of the public investors who became stockholders of Alliance Select should signal the death of the five-person commission. Why not reduce the number of the commissioners who should not hold office at the SEC and leave an executive director to head the agency? Just asking.