From lawyering to lawmaking

Emeterio Sd. Perez

Emeterio Sd. Perez

ON my way home from Manila a week ago, I was monitoring in our car’s radio the congressional hearing on the alleged proliferation of drug trade inside the New Bilibid Prison. When I heard the line of questioning by a legislator, I became curious about his identity.

The way the congressman posed the questions sounded familiar because I have closely observed how he had cross-examined a witness when I attended a court hearing on a corporate fight. This legislator was one of the lawyers.

Then, a broadcaster identified him as Capiz Rep. Fredenil H. Castro. I was right about my hunch.

I met Mr. Castro many years ago. I knew he was not related to the late lawyer Dakila Castro, who spent his retirement days at his home in the same barangay where I was born. But I knew that as a young lawyer, the lawmaker from Capiz, has tangled in court with the older Castro..

Of course, Fredenil H. Castro has his own identity now. As Capiz congressman, incidentally, he represents my in-laws, who were also from his hometown.

First Pacific-controlled board

In a public ownership report as of June 30, PLDT Inc. listed five principal stockholders owning 99.208 million common shares, or 45.92 percent. Philippine Telecommunications Investment Corp. had 26.034 million shares, or 12.05 percent; Metro Pacific Resources Inc., 21.557 million shares, or 9.98 percent; Non-Philippine subsidiary of First Pacific Co. Ltd., 7.654 million shares, or 3.54 percent; NTT Communications Corp., 12.633 million shares, or 5.86 percent; and NTT DoCoMo Inc., 31.33 million shares, or 14.5 percent.

With the above significant stockholders’ credited with ownership of 45.92 percent, the public held 116.381 million PLDT common shares, or 53.87 percent. This much ownership should have made the public PLDT’s majority or controlling stockholders.

The list of PLDT’s 13 directors showed an all-Filipino board but do not belong to the public. As in the past, all PLDT directors from Manuel V. Pangilinan to the three independent directors were all nominees of the Indonesian-controlled First Pacific Co. Ltd.

Ownership profile

Like PLDT, Globe Telecom Inc. also has a foreign-owned corporate stockholder. Singapore Telecom Int’l Pte Ltd. holds 62.646 million common shares, or 47.19 percent, an ownership that makes Ayala Corp. a minority stockholder with 40.725 million common shares, or 30.68 percent.

With the two principal stockholders combining for 103.371 million common shares, or 77.87 percent, Globe Telecom credited the public with 29.237 million common shares, or 22.02 percent. Insiders hold the remaining common shares.

The 11-person board of Globe Telecom also does not reflect the public ownership, which is equivalent to 22.02 percent. As other listed companies do, Globe Telecom does not recognize the public as its partner. Instead of a nominee among the public, it appoints three independent directors.

A 22.02 percent ownership would have entitled the public to at least 2 board seats in Globe Telecom. Of course, they don’t deserve any directorship.

An email

The contents of the following email that I received via my Yahoo account are self-explanatory. But I have to be honest in telling the sender of this message that I cannot guess the corporate move of any businessman whether he is a Filipino or foreigner.

For the sake of the public, I can only call on the officials of the Securities and Exchange Commission to require ISM Communications Corp. to make the proper disclosures if it has any dealing with businessman Kazuo Okada.

Okada, a Japanese businessman, is one of the investors in a casino project called Tiger Resorts.
As requested, I am not identifying the person who sent the email asking:

“Why Okada may go for ISM?

1. Market Capitalization is just over P1.5 billion. Companies listing through the backdoor favors smaller market caps so they could easily price their stocks.

2. This was an RVO company. Ongpin has fallen out of favor from our President, so he would rather sell the company to willing buyers than infuse any money into a business associated with him.

3. The last major shareholder, Ashmore group was just recently bought out at P1.76. No more big holders to worry about. Easier to sell the company without hurting the rest of the stockholders.

4. ISM price was dragged down from P2 due to President Duterte’s anti-Ongpin campaign. ISM is owned by Eric Recto, Ongpin’s nephew. But ISM is not engaged in any gaming business, so there was no basis for the drop in price.

5. The recent stock rights offering allowed ISM to raise P300 million cash. The company has both cash and positive retained earnings. It also has a little share of PBcom left, which could provide more cash and positive retained earnings.

6. ISM stock price has already found its bottom and has stabilized. If a stock can’t go down, there’s no other way but up.

7. This stock is the most ready for infusion or backdoor listing by any business wanting to list shares. No negative retained earnings, small market cap, and most importantly, owners that should be willing to sell.”

As I said at the beginning of this piece, I am not one to speculate on a businessman’s plan. Whether or not Okada, or any other businessman, has decided on choosing ISM for a backdoor listing is anyone’s guess.
Will SEC officials listen to the public like they do when listed companies seek refuge in them? Your guess is as good as mine.


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