CERTAIN politicians have been talking about running in next year’s national elections, and one can only imagine how much they will be spending next year in hopping from island to island to make sure their campaign covers a significant area of the archipelago of more than 7,000 islands.
In the first place, where do these politicians intend to get the money to finance their trips? Perhaps, as in past elections, some politically inclined businessmen would back up their bets financially to protect the candidates from further “harassment.”
And what do we normally hear the winning candidates do after successfully using the political funds they received from donors? They waste no time and begin appropriating the people’s money to either pay back what they owed their supporters or take advantage of the opportunity to enrich themselves while in office, or both.
We seldom hear of politicians who sell their own assets to finance their campaign, like what I heard the family of Sherwin Gatchalian is doing. The Gatchalians, who own the Waterfront hotel group, according to the talk, plan to sell a unit to foot the bill for Sherwin’s senatorial ambition.
Their funding option, of course, would be better than that of others who would run and, regardless of the result of the election, be able to buy a hotel using their “savings” —that would be “pre-meditated” corruption even if the candidate lost the election.
Due Diligencer happened to meet Jomel T. Gonzaga, Waterfront’s group marketing communications chief. I asked him about Gatchalian’s political plan. He would not comment on the sale of a hotel, but he probably agreed with me that selling an asset like a hotel would be a business decision that could only be made by the board.
This corporate move is a way of protecting the minority interest of the public stockholders, who also invest in Acesite (Phils.) Hotels Corp. and Waterfront Philippines Inc.—both listed.
Incidentally, without them knowing it, the Gatchalians have adopted the political and business strategy of the Lopezes.
Many years ago, Eugenio Lopez Sr. acted as the businessman in the family while Vice President Fernando Lopez was the politician. The “division of labor’ between them provided the family business a safety net from encroachment by politicians who begged – blackmailed? – big business for money.
The Lopezes have long been in both business and politics. They also used to control a media empire that owned a newspaper, a radio station and a TV group. They did away with the losing The Manila Chronicle but even to this day maintain ownership of the more profitable Channel 2 and its radio unit DZMM.
Unlike the Gatchalians, the Lopezes are present in almost every business venture. While the latter have sold the Manila Electric Co. to the Hong Kong-based Indonesian conglomerate, First Pacific Co. Ltd., they remain in “power” as controlling stockholders of First Philippine Holdings Corp. (FPHC), which, in turn, owns many other ventures including First Gen Corp. (FGen).
FPHC and FGen are only two of a number of companies owned by the Lopezes, who are either the only stockholders or majority stockholders.
FGen has authorized capital stock (ACS) of 7.735 billion shares, divided into 5 billion common shares and 2.735 billion preferred shares. These, in turn, consist of 1 billion B shares; 1.5 billion E; 100 million preferred F and 135 million preferred G series.
The company’s common shares carry a par value of P1; its B and E preferred, P.050; and its F and G preferred, P10, for a total authorized capital of P8.6 billion.
Of FGen’s 5 billion common ACS, 3.661 billion shares are paid-up, as of the company’s October general information sheet (GIS) filed with the Securities and Exchange Commission and posted on the website of the Philippine Stock Exchange. Filipino stockholders own 3.156 billion common shares, or 45.21 percent; 1.467 billion B and E preferred shares, or 27.38 percent; and 233.606 million preferred B shares, or 4 percent, for a total of 4.858 billion shares, or P6.227 billion computed at par value. Foreigners own 504.79 million shares, divided into 504.646 million common; 1,000 F preferred and 142,700 G preferred.
On Friday, FGen closed trading at its session low of P21.90 after hitting a high of P22.60, its opening price. It fell to a 52-week low of P21.30 and peaked at a year high of P22.60.
As of June 30, 2015, FGen has piled up retained earnings of $813.245 million, or P38.225 billion computed at P47 to a US dollar.
First Philippine Holdings Corp. owns 2.425 billion FGen common shares, or 66.24 percent.
In presenting the capital stock profile of FGen, Due Diligencer is not zeroing in on the Lopez-controlled listed company. Rather, FGen, with its financials, is used here to warn politicians to keep their hands off the funds of listed companies, which are partly owned by the public. Based on the rules of the SEC and the PSE, listed companies are also public when at least 10 percent of their outstanding shares are held by investors outside the majority stockholders.