Confusing the public with percentages

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GENERAL information sheets (GIS) may be among the more important disclosures by listed companies posted on the website of the Philippine Stock Exchange. By reading them, public investors will know if the collective number of shares they own have either increased or decreased.

As used in this piece, “public” refers to both Filipinos and foreigners who trade on listed stocks.

For the public to be able to fully appreciate a GIS, they may want to monitor changes in the number of shares owned by Filipinos and those held by foreigners. Even if they find certain information missing, they will at least know the number of foreigners who also own listed shares.

Some listed companies may be guilty of omitting certain data through the “cut-and-paste” method of reporting their ownership profile. Despite this “sin of omission,” the more curious among the public investors would find certain interesting changes in the ownership profile and capital of listed companies.


Sorianos’ holdings

Let’s take a look at A. Soriano Corp. (ASC), which reported in a GIS authorized capital stock of 3.464 billion common shares, of which 2.5 billion were outstanding and 964.311million remained unissued.

Of ASC’s outstanding common shares as of March 31, Filipinos and foreigners owned 1.982 billion or 79.292 percent, and 517.692 million or 20.708 percent, respectively.

(Note. The GIS placed the percentages at 79.28 percent for Filipinos and 20.72 percent for foreigners.)
Among the foreigners who hold ASC shares are 10 Americans, 147,259 shares; three British, 1,063 shares; one Canadian, 3,293 shares; three Chinese, 21,888 shares; and one Dutch, 5,067 shares.

Ironically, ASC’s filing identified three stockholders as “foreign” but did not name them despite their ownership of 517.512 million shares, or 20.71 percent, according to the GIS.

ASIII’s holdings

Andres Soriano 3rd is probably one of these three unidentified foreigners who owned 517.513 million shares, or 20.708 percent as recomputed.

Additional information obtained by Due Diligencer from ASC’s public ownership report (POR) as of March 31 listed Soriano as a direct stockholder with 50.49 million ASC shares. He also indirectly owned 438.938 million ASC shares. In all, he held a total of 489.428 million ASC shares, or 19.58 percent.

In its definitive information statement (DIS), ASC disclosed that of the shares lodged with PCD Nominee Corp., “Maybank ATR KimEng Securities Inc. is the sole owner of more than 5%, specifically 33.176%, the bulk of which or 17.558 percent is owned by Deerhaven LLC, a company registered in Delaware, USA.”

According to the same DIS, the “shares owned by Deerhaven LLC were “indirectly owned by Andres Soriano III.”

When recomputed, 33.176% equals 829.4 million, which would be the number of ASC shares held by Maybank ATR KimEng. In turn, 17.558% equals 438.95 million of 2.5 billion outstanding ASC shares, but only equivalent to 145.626 million shares if the percentage is taken from 829.4 million ASC shares held by Maybank ATR KingEng.

Due Diligencer’s take

Any of these filings should have directly identified the three foreigners mentioned in the GIS as holders of 517.513 million ASC shares. They did not. Instead, Due Diligencer had to assume that Soriano, being an American, could be one of them.

Who are the other two whose holdings could also be significant? Will ASC or the Sorianos provide public investors the answer?

If Soriano owned only 145.626 million of 829.4 million ASC shares held by Maybank ATR KimEng, then the two unnamed stockholders would combine for 683.774 million shares, or 27.351 percent of 2.5 billion outstanding ASC shares.

Sometimes, even disclosures that are intended to be as informative as possible could end up confusing the public investors more instead of enlightening them. How would one, for instance, interpret ASC’s statement that “the bulk of which or 17.558% is owned by Deerhaven…?” Did the company mean 17.558 percent of 2.5 billion outstanding ASC shares, or 17.558 percent of 33.176 percent? Just asking.

esdperez@gmail.com

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