Emphasizing the ART of full disclosure

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Emeterio Sd. Perez

Emeterio Sd. Perez

GUESS what? Here is an example of a disclosure, which was filed by Ayala Corp. (AC) that failed to include the more important details that would be of interest to the public.

In his posting dated January 30 on the website of the Philippine Stock Exchange, John Eric Francia, an AC managing director, told the Philippine Stock Exchange (PSE) that “a wholly owned subsidiary of Ayala Corp., achieved financial close in relation to its acquisition of an approximately 17-percent ownership in GNPower Mariveles Coal Plant Ltd.”

Perhaps Francia and the Ayala management do not consider significant the identity of its “wholly owned subsidiary” as the buyer and the price of the acquisition. But to the public, they are of utmost important so that they could weigh the information in deciding whether to buy more or sell AC shares.

In fairness to AC, it is not the only listed company that is posting incomplete disclosures, because neither the PSE nor the Securities and Exchange Commission (SEC) find anything wrong with “omissions.” These so-called public companies must not have been schooled on ART, which stand for accuracy, relevance and timeliness of the market’s full disclosure rule.


Amended report. On January 28, Robinsons Land Corp. (RLC) submitted to the SEC an amended annual report for the period ended September 30, 2013. The public investors who may own RLC shares need not worry about the amendment to the report that was “revised to include the vice chairman and chief executive officer as signatory instead of the president and chief operating officer.”

As posted on the website of the Philippine Stock Exchange, RLC’s amended annual report also included Lance Gokongwei, who also “acts as principal financial officer,” as the first signatory, followed by Frederick Go, his cousin, president and chief operating officer (COO); Constante Santos, senior vice president-corporate controller; and Rodolfo Malit, first vice president-controller, principal accounting officer; and Rosalinda Rivera, corporate secretary.

The inclusion, however, of Gokongwei, son of John Gokongwei Jr., chairman emeritus of the companied he founded, should not have been “instead of the president and COO” but should have been “in addition to,” although the younger Gokongwei occupied the most prominent space in the report as the first signatory.

Omissions. Has former Chief Justice Artemio Panganiban given up his directorships in a number of listed companies? If so, then the disclosure Robinsons Land Corp. posted on the website of the PSE would be truthful. If not, who would be guilty of omission? Would it be the Gokongwei-controlled property company or Panganiban himself?

Here is what an RLC filing says: Panganiban, 76, was elected as an independent director of RLC on May 14, 2008.” Does this mean he was no longer an independent director of the same company as of January 28, which was the date of the disclosure? Of course, he still is.

At the same time, the same filing enumerated his other credentials such as “as adviser, consultant and/or independent director of several business, civic, nongovernment and religious groups.” It should have named them so that you and I would be impressed by the list. Instead, the public have to go to other sources for an elaboration of RLC’s filing on directorships.

Who owns which. Bank of Philippine Islands (BPI), which is controlled by the Zobels, also has Panganiban in its board as independent director. But it is not one to omit the other listed companies that believe in Panganiban to be a big asset to its board.

The other listed companies, aside from Robinsons Land, named by BPI in its filing that have elected—the more appropriate word would be appointed—Panganiban director were Manila Electric Co., Petron Corp., First Philippine Holdings Corp., Metro Pacific Investments Corp., Metro Pacific Tollways Corp., GMA Network Inc., GMA Holdings Inc., Tollways Management Corp. and Asian Terminals Inc. and Robinsons Land.

As has already been mentioned, BPI belongs to the Ayala group controlled by the Zobel family. Meralco, Metro Pacific Tollways Corp. and Tollways Management Corp. are units of the Metro Pacific group; Petron Corp. of San Miguel Corp. and First Philippine Holdings of the Lopezes.

GMA Network Inc. and GMA Holdings Inc. do not belong to a conglomerate while Asia Terminals listed two significant stockholders, namely, DP World Australia and ATI Holdings Inc.

esdperez@gmail.com

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