Do insiders know better, if not best?

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Emeterio Sd. Perez

JOSE C. Ibazeta is a member of the seven-person board of International Container Terminal Services Inc. (ICTSI). His sale of 2,000 ICTSI common shares at P104 each on Oct. 27 this year reduced his holding in the company to 2,798,310 ICTSI common shares, or 0.138 percent of 2,034,195,466 outstanding ICTSI common shares.

Jose Joel Maghinang Sebastian, one of ICTSI’s two senior vice presidents (SVP), owned 19,997 ICTSI common shares after selling 5,000 common shares at P106.60 each on Oct. 10.

Earlier, on Oct. 5, Sebastian sold 25,000 ICTSI common shares at P105.80 apiece, leaving him with 24,997 ICTSI common shares.

Aside from Sebastian, who handles finance, Rafael D. Consing Jr. is ICTSI’s other SVP, also concurrently chief financial officer and compliance officer.


On Nov. 8, ICTSI common shares closed trading at P102.30, after opening the session at P103. The stock hit a high of P104 and dropped to a low of P101.50.

Acquisitions

ALFONSO G. Reyno 3rd is president and chief operating officer and director of Manila Jockey Club Inc. (MJC). He bought 7,400 MJC common shares in eight trades on Nov. 2 and 7,500 MJC common shares in four trades on Nov. 3. He made the additional acquisitions at prices ranging from P2.71 to P2.78 each.

After buying a total of 14,900 MJC common shares in two days, Reyno increased the number of MJC common shares he indirectly owns to 11,870,898 MJC common shares, or 1.192 percent of 996,161,286 outstanding MJC common shares.

CHRISTOPHER G. Reyno, who is also a member of MJC’s 11-person board, increased the number of MJC common shares that he indirectly owns to 11,100,544 MJC common shares, or 1.114 percent. That was when he bought 24,900 MJC common shares in 12 trades in two days. He bought 17,400 MJC common shares on Nov. 2 and 7,500 MJC common shares on Nov. 3.

Alfonso 3rd and his younger brother, Christopher, are sons of Alfonso R. Reyno Jr., who is chairman and president of Manila Jockey Club.

The younger Reyno bought MJC common shares at prices ranging from a high of P2.78 and a low of P2.72.
MJC common shares closed trading at the day’s high of P2.83 on Nov. 8. The stock opened the day’s session at the day’s low of P2.74.

EDC’s 3 new directors

Philippines Renewable Energy Holdings Corp. (PREHC) assigned an Energy Development Corp. (EDC) common share each to its three nominees to the 12-man board of EDC on Oct. 12 this year. The assignment to David Ludoff, David Baldwin and Christopher Low reduced PREHC’s holding in EDC to 8,899,999,810 common shares, or 47.50 percent.

(Note. The filing on the reduction of PREHC’s ownership by three shares to 8,899,999,810 EDC common showed only the equivalent of 31.66 percent, which could be a typographical error. The result of Due Diligencer’s computation was 47.5 percent, which was what EDC presented in a public ownership report (POR) as of Oct. 12, 2017

Aside from PREHC, the Lopez-controlled EDC also listed in the POR Red Vulcan Holdings Corp. as holder of 7.5 billion EDC common shares, or 40.028 percent.

First Gen Corp. and Northern Terracotta Corp., which are EDC’s affiliates, were reported as holders of 148,910,559 EDC common shares, or 0.795 percent, and 148,092,918 EDC common shares, or 0.79 percent, respectively.

Due Diligencer’s take

A company appoints its nominees to the board, as what Philippines Renewable did as one of EDC’s record and beneficial stockholders with significant holdings.

As a principal stockholder, PREHC elected three nominees to EDC’s board. It assigned to them an EDC common share each to qualify them to sit on the board.

What happened to these nominees’ EDC common shares when their one-year term ends next year? Although a filing showed the three directors were PREHC’s nominees, it would be up to the stockholder to either retain or replace them.

This is what makes independent directors the board’s especial nominees. Even with nominal shares, they are entitled to the same pays and perks that regular directors receive.

As for the public stockholders of listed companies, they could do nothing against independent directors, whose only qualification is for them to be accepted by the majority owners.

Will the Securities and Exchange Commission do something to level the playing field for the public investors who, in the first place, enable family-owned corporations to list their common shares on the Philippine Stock Exchange? Just asking.

esdperez@gmail.com

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