• ‘Confusingly similar’ company names

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    IF public investors are confused by the use of certain modifiers of listed companies to differentiate one from the other, so am I. As a matter of fact, if they were to be asked about the former identities of some public companies that got their shares listed via the backdoor, perhaps some would access the website of the Philippine Stock Exchange (PSE) for the right answers.

    For instance, what does “metro” mean when in corporate names? In the case of its use in Metrobank, the public knows that it is short for “metropolitan” in Metropolitan Bank and Trust Co. Could the public easily recognize Metrobank by its market symbol, which is MBT? They will definitely not.

    The rules of the Securities and Exchange Commission (SEC) provide that “the name shall not be identical, misleading or confusingly similar to a corporate name or partnership name registered with the Commission, or with the Department of Trade and Industry, in the case of sole proprietorships” (Commission here refers to the SEC).

    The above quote is contained in SEC Memorandum Circular 5 Series of 2008, apparently to guide businesses on company registration. The issuance of said circular was intended “to keep abreast with developments in business and information technology in the country,” as if this has anything to do with the choice of company names.

    “If the name applied for is similar to that of a registered corporation or partnership, the applicant shall add one or more distinctive words to the proposed name to remove the similarity or differentiate it from the registered name,” the SEC circular says.

    What if a company name contains only two words, such as ABS-CBN Corp. and Now Corp.? How do you change them? Despite the existence of these entities, does this mean that anyone could still incorporate a business using another word to differentiate it from ABS-CBN and Now?

    If one were to go by the SEC rule, a number of listed companies would, to paraphrase it, be “identical, confusingly similar” company names. If ABS-CBN Corp. and Now Corp, were allowed by the SEC, what would stop the incorporation of, say, “Earth Corp.”? How about Global Corp.? Would the SEC allow such company names despite the regis ration with it of Millennium Global Holdings Inc. and Metro Global Holdings Corp.?

    After all, Global Corp. may not even be a holding company. It could be an investment vehicle for the placement of funds in selected listed stocks. On the other hand, Millennium Global and Metro Global are holding companies, which should own their respective subsidiaries in which their ownership should be either 100 percent or “50 percent plus one percent.”

    Are these two listed companies living up to their billing? Being global means more than simply attracting the public to trade in their listed shares. Their use of “global” may be misleading. Does the word mean they are global in their respective ventures?

    Metro Global Holdings is formerly Fil-Estate Corp. Why change the name when Fil-Estate is not even “confusingly similar” to that of Global-Estate Resorts Inc., which is the corporate vehicle of Megaworld Corp. that took over the Fil-Estate property companies?

    Both Millennium Global and Metro Global changed their names to be able to go public. The latter is formerly Fil-Estate Corp., then the listed flagship of the Sobrepenas.

    Incidentally, Fil-Estate group’s property companies were taken over by Megaworld, which now owns 9 billion GERI shares, or 82 percent. The Sobrepenas ended up as minority stockholders with 686.26 million GERI shares, or 6.24 percent.

    On the other hand, Millennium Global replaced IPVG Corp. in the roster of PSE-listed companies by going backdoor. If it is not yet global, at least its ownership profile is global. Its largest single stockholder is Conqueror Space Limited, which lodged its 756.1 million Millennium shares, or 35.4 percent, with PCD Nominee Corp.

    PCD Nominee, in turn, classified said block of shares owned by Conqueror as “foreign,” which should make Millennium global. Then it classified the same shares as being “Filipino” under the heading “citizenship.” Again, the question here is which should prevail? Should the PCD-held shares be foreign or Filipino?

    Suddenly, it is not only the names that are “confusing” but also the citizenship of the owners.

    esdperez@gmail.com.

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