• Are BHI and Calata taking the public for granted?


    Emeterio Sd. Perez

    IF public stockholders are the majority stockholders of a listed company, their ownership should give them control of the board.

    Public stockholders, however, have never been allowed to elect their nominees to the board of any listed company. They are portrayed only as the controlling stockholders in a number of public ownership reports (POR).

    Boulevard Holdings Inc. (BHI) and Calata Corp. (CAL) are only two examples of listed companies that make their public stockholders the majority owners. Never mind that even if their common shares are listed on the Philippine Stock Exchange (PSE), they are not considered public.

    Does this mean the ownership reports posted by BHI on the PSE’s website have long been lying to the public?
    The answer should come only from the Securities and Exchange Commission (SEC), the body vested with oversight regulatory authority over the exchange, which is a self-regulatory organization.

    Ironically, “public company” may be a misnomer in this country as most business owners list their company shares to save on tax payment with the Bureau of Internal Revenue and not to share ownership with investors outside the family that owns the business. Listing shares simply makes a stock corporation listed.

    Ownership profiles

    By going over their ownership profiles based on their PORs, public investors could readily conclude that Boulevard Holdings and Calata are, indeed, public companies, when they are not.

    As of Oct. 10, Boulevard Holdings classified 5.319 billion BHI common shares, or 44.329 percent, as non-public. It attributed ownership of 6.681 billion BHI common shares, or 55.671 percent, to its public stockholders. The non-public BHI common shares and publicly owned BHI common shares add up to 12 billion common shares, representing the outstanding common shares of Boulevard Holdings.

    Both Boulevard Holdings and Calata did not show their principal stockholders in their PORs. Instead, they listed the members of the board either as direct or indirect stockholders.

    Boulevard Holdings’ POR showed nine directors with 5.317 billion BHI common shares, or 44.306 percent. The board’s holdings, added to 2.75 million BHI common shares held by an executive, sum up to 5.319 billion BHI common shares, or 44.329 percent. The total represents the non-public common shares of Boulevard Holdings.
    As of Oct. 4, six directors of Calata owned 219.406 million CAL common shares, or 38.469 percent.

    On the other hand, Calata’s POR showed the public as holders of 350.935 million CAL common shares, or 61.531 percent.

    Significant stockholders

    The holdings of the public in Calata even topped the number of non-public common shares. If these outsiders really own 61.531 percent of 570.341 million outstanding CAL common shares, they should have control of the company’s board.

    Yet, they don’t, for reason known only to Calata insiders.

    Like Calata, Boulevard Holdings reported the public as being not necessarily its majority stockholders. Nevertheless, the company’s POR made them significant stockholders. How should we understand this?

    It is very obvious that both Boulevard Holdings and Calata have not been telling the SEC and the PSE their true ownership profiles. Unfortunately for the public, the two regulatory authorities have long been tolerating their reports in their POR.

    Of course, wrong attribution of ownership that gives the impression that public investors are either the principal or controlling stockholders, is not a monopoly of Boulevard Holdings and Calata. It will take time to review all the PORs on the PSE website. It is enough that the public investors are told that they are being taken for a ride by listed companies.

    The public stockholders of listed companies are never going to be the majority or controlling stockholders. The families who own these listed companies will never allow outsiders to peek into their business decisions, much less look into their financials.

    Due Diligencer’s take

    As has often been reported in this space, wrong entries in PORs of listed companies are not a monopoly of a certain company, or only of Boulevard Holdings and Calata. A few other listed companies do the same as shown by their ownership profiles.

    It is up to the SEC and PSE to find either the omission or exaggeration in the PORs that may have been committed by some listed companies. If these postings list the public as their majority or principal stockholders, something could be wrong somewhere. Are PSE-listed companies telling the true numbers in their filings? Just asking.



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