Andrew Tan’s liquor empire

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FOR the information of the readers of The Manila Times who also find time to include Due Diligencer in their reading habit, I could not categorically define for them the 10-percent minimum public ownership required of listed companies under the rules imposed by the Securities and Exchange Commission (SEC). All I know about ownership profiles I learned from postings on the website of the Philippine Stock Exchange (PSE) as to the identities of individual stockholders.

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However, I enjoy some kind of advantage over the public because from time to time, I receive information not otherwise easily available to them. For instance, recently I was told about the use of offshore companies by listed companies to circumvent the SEC’s rule on the 10-percent minimum public ownership. Certainly, I have no way of researching on these leads because these so-called offshore stockholders are not covered by the market’s full disclosure rule and thus their owners are not disclosable.

Besides, it would be too expensive for me to go to the Virgin Islands.

Perhaps, to SEC officials and the PSE management team led by its president, Hans B. Sicat, it is not necessary to verify the ownership profile of such offshore corporate stockholders. For them, disclosing in public ownership reports (POR) that the public owns X amount of listed companies’ outstanding shares is enough compliance with the 10-percent minimum public ownership rule.

In many instances, POR filings list the public as significant stockholders; ironically, the public stockholders never get to elect their representatives on the board.

Emperador Inc. is an example of a listed company which could be qualified to be more public than others. But is it? It is up to the public to make their own conclusion.

A POR posting as of Sept. 30 showed that Alliance Global Inc. holds 13.14 billion, or 81.5 percent of Emperador’s 16.12 billion issued and outstanding shares. Of its total holdings, AGI indirectly owns 1.43 billion. Ergo, the public owns 2.98 billion shares, or 18.5 percent. (The company rounded up the numbers to one decimal place. As a result, Alliance Global’s holdings represent 81.5 percent of 16.12 billion outstanding shares and those of the public 18.5 percent.)

Like other listed companies that may not necessarily be public, Emperador also reported a list of top 100 stockholders that included 14 individuals who owned 621,359 shares, and five corporate stockholders as of Sept. 30. At the top are Alliance Global, 10.7 billion shares, or 66.3 percent; Arran Investment Private Limited, 1.12 billion shares, or 8.4 percent; Dew Dreams International Ltd., 720 million shares, or 4.47 percent; Shiok Success International Ltd., 711.765 million shares, or 4.4 percent.

Aside from 10.7 billion shares, Alliance Global owned another block of 1.02 billion shares, or 6.3 percent. PCD Nominee held 1.36 billion shares, or 8.42 percent, for foreigners, and 502.9 million shares, or 3.12 percent, for Filipinos.

Information that reached Due Diligencer suggested that Emperador may not have qualified to list 15 billion of its 16.12 billion outstanding shares for violating the 10-percent minimum public ownership rule. As claimed by an emailer, certain corporate stockholders may even be owned by businessman Andrew Tan, who is the majority stockholder of Alliance Global. There is no way the public could verify the ownership profile of Emperador unless Mr. Tan would volunteer to disclose the identity of the stockholders who control his company’s corporate stockholders.

Of course, Mr. Tan has the right to argue against disclosing the ownership profile of Shiok and Dew Dreams, which are Emperador’s significant stockholders. After all, these two offshore companies, being closed corporations, are not covered by the full disclosure rule that governs PSE-listed stocks.

If the public really own 2.982billion EMP shares, , as Mr. Tan claimed in Emperador’s POR, then they would be too rich for him to ignore because their holdings would have a market value of P27.14 billion. In short, while the public would be attributed with this much wealth, their worth is dwarfed by Mr. Tan’s P119.95 billion holdings in a liquor empire where he is the acknowledged king.

esdperez@gmail.com.

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