WHO among the insiders of Alliance Select Food International Inc. (ASFII) will be courageous enough to expose company financial secrets?
Will it be Joseph Peter Roxas, the newest member of the seven-person board of Alliance Select.
Roxas indirectly owns 1.785 million, or 0.0714 percent of 2.5 billion outstanding shares. His election coincided with the resignation of Jonathan Y. Dee as chairman, effective Feb. 1. A filing described Roxas and Dee as “first cousins by consanguinity.”
Incidentally or not, with Roxas’ election to the ASFII board, Hedy S.C. Yap Chua lost her seat and her right as a significant stockholder, even if, like Roxas, she is only an indirect stockholder of the company.
Chua, along with Albert Hong, has been accused of disclosing what Alliance Select’s top managers described as financial secrets undisclosed in any company filing.
Denial of preemptive right
Chua and Albert Hong are the two Singaporean stockholders of Alliance Select. The former represents in the board Harvest All Investments Ltd. and Victory Fund, which own 177.261 million ASFII shares, or 7.09 percent, and 138.474 million ASFII sha res, or 5.54 percent, respectively, for total holdings of 315.735 million, or 12.629 percent.
Two years ago, ASFII had 1.069 billion outstanding shares of which Albert Hong, also Singaporean like Chua, owned 39.072 million, or 3.65 percent. Harvest All and Victory Fund held – and still owns today – 177.261 million shares, or 16.58 percent, and 138.474 million shares, or 12.95 percent.
With their holdings equivalent to 33.18 percent, as of March 2014, Hong and Chua got elected to ASFII’s seven-person board. They were not to stay long as directors of a company they selected for their money among close to 300 listed stocks because their holdings were diluted as a result of the entry of a new stockholder.
Alliance Select justified the ouster of Chua when it said in a filing she did not subscribe to “the company’s stock rights offering,” which was not true because she was, in fact, denied her preemptive right.
As a result of the majority stockholders’ denial of her right as an existing stockholder to subscribe to new issuance of shares, Chua lost her seat in the board
“The percentage of ownership of Harvest All and Victory Fund decreased from 11.82% and 9.23% to 7.09% and 5.54%, respectively,” ASFII said in justifying the company’s majority owners’ move against the Singaporean group.
Was this what happened? Roxas, the board’s new member, may want to enlighten the public on the reason or reasons for the Singaporean group’s loss of representation in the ASFII’s board.
The question is, being a regular director, will Roxas abandon his fellow members of the board by turning against them?
If Roxas may not be able to respond to the query, it is up to Alliance Select and its entire seven-person board to decide whether or not non-disclosure of company secret or secrets is a violation of the policy of full transparency.
If the public would be interested to know more about Alliance Select, all they have to do is to access www.edge.pse.com.ph. They may want to go over the disclosures which the company defines as “legal proceedings.”
Among these “legal proceedings” is “a criminal complaint for revealing secrets with abuse of office against two of its directors, Hedy Yap Chua and Albert Hong Hin Kay.”
Jonathan Y. Dee, ASFII president, who happens to be a first cousin of Roxas, filed the suit “to protect its interest.” The use of “its” refers to Alliance Select.
“The company has reasonable cause to believe,” Dee said in the filing, “that Yap-Chua and Hong in breach of their fiduciary duty to the company revealed information relating to the company’s financials given to them in confidence.”
Jonathan Y. Dee, who eventually resigned as chairman of the board, did not disclose the “company’s financials” that he or the company gave the two Singaporeans “in confidence.” For the sake of the public, he should reveal the information that he deemed should have been restricted for directors’ knowledge.
What were the secret financials that should not reach the public?
Were Dee and his lawyers correct in asserting that Yap-Chua and Hong violated the company’s trust by revealing such secrets possibly to outside parties?
If so, why then did Dee and his fellow ASFII top executives deprive the public of so-and-so information that they entrusted only to Singaporeans?
What happened to the management’s “fiduciary duty” to the public investors who own ASFII shares? Doesn’t management led by the board find the public deserving of information about the goings-on inside the boardroom? Why limit company secret or secrets to directors?