• GIS filings should be made compulsory



    GENERAL information sheets (GIS) are among the required filings that are submitted to the Securities and Exchange Commission (SEC) and posted on the website of the Philippine Stock Exchange (PSE). They serve as an investors’ guide to buying and selling listed stocks.

    In going over the PSE’s website, the investing public may learn which listed companies are compliant with the rule on the submission of GIS and which are not. As a matter of fact, Due Diligencer goes over all kinds of disclosures everyday, and discovers the omissions of GIS by some listed companies. This could lead public investors into thinking that the submission of GIS is not at all mandatory.

    There is no need to name names. By reviewing the PSE postings, the SEC should be able to notice the omission of GIS among the filings made by listed companies.

    Do investors need to tell the SEC officials that, as public traders, they rely on the Commission for their protection against the nefarious activities of some people that may affect their stock transactions?

    It is up to the SEC’s market monitoring teams to explain to the investing public whether or not the GIS is required under the market’s full disclosure rule. As emphasized a few times in my previous columns, a filing should follow the ART of full disclosure. The acronym stands for accuracy, relevance and timeliness.

    Atlas Mining
    To illustrate, an attachment to a GIS filing of Atlas Consolidated Mining & Development Corp. named PCD Nominee Corp. as holder of its 2.087 billion common shares, or 100 percent of the outstanding common shares, as of July 27. This conclusion was based on an ownership report of Stock Transfer Service Inc., the company’s stock transfer agent.

    As one of partially nationalized stock corporations, Atlas Mining is covered by the 60-40-percent constitutional requirement. The ratio means Filipinos should own at least 60 percent of the outstanding capital stock of such company while foreigners are limited to 40-percent ownership

    Of the PCD-held Atlas common shares owned by 20,799 stockholders, 13,093 Filipinos controlled 1.990 billion, or 95.345 percent, while 7,706 foreigners of various nationalities owned 97.145 million common shares, or 4.655 percent.

    The stock transfer report identified Atlas’ 19 stockholders as foreigners, topped by 6,393 stockholders who held 91.656 million Atlas shares and were identified only as “foreign.”

    Apparently, the report did not specify the nationalities of said “foreign” stockholders, or Atlas Mining may not have provided the stock transfer service with their countries of origin.

    PCD-held shares
    While the ownership report of Stock Transfer Service divided the stockholders of Atlas Mining between Filipinos and foreigners, the company’s GIS had less PCD-held shares by separating the holdings of certain stockholders.

    As record stockholder, PCD held 1.780 billion Atlas shares — 1.707 billion Atlas shares for Filipinos and 72.397 million shares for foreigners.

    Of 1.707 billion Atlas shares PCD held for Filipinos, the mining company explained in a footnote:

    “Of the total (of 1.707 billion shares), 405.966 million shares (23.78 percent) of PCD-held shares, are “under the name of Alakor Securities Services Corp. (ASC) and 916.005 million (53.65 percent) shares under the name of BDO Securities Corp. (BDOSC).

    “Of 405.966 million shares under the name of ASC, Alakor Corp. (AC) owns 270.708 million shares (66.68 percent) and of 916.005 million shares under the name BDOSC, 73.18 million shares (7.99 percent) are owned by AC while 9.406 million shares (1.03 percent) are owned by SM Investments Corp. (SMIC).

    SMIC is the listed holding company of the group of companies either owned or controlled by businessman Henry Sy Sr. and his family.

    Due Diligencer’s take
    Will the SEC make compulsory the posting of GIS on the PSE website?

    If so, the SEC would be doing a great service to the public investors who are mainly responsible for enabling family-owned and controlled corporations to get their shares listed on the exchange.

    Don’t expect the private companies, though, to allow the public traders to gain even a board seat. They are listed but not public; it only means some of their shares are publicly traded.

    However, the 10-percent minimum public ownership rule (MPO) is too vague for public investors to interpret to mean they are entitled to at least a directorship. They are not. The SEC has yet to strictly impose the MPO by first defining what the rule is all about.

    Would the SEC drastically overhaul the MPO by measuring public ownership not by the number of shares they own or hold but by the number of board seats allocated to them? Just asking.



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