RESEARCHING on the ownership of companies at the Securities and Exchange Commission is not only expensive; it is also very difficult despite the computerization of the SEC’s corporate files.
Don’t blame this on the commission or the policies laid down by its five members, led by Chairperson Teresita Herbosa, because it is the layers of holdings of holding companies that every researcher has to contend with.
Researchers may even find cumbersome going over the ownership profiles of some, if not all, of those listed on the Philippine Stock Exchange (PSE), especially for those who are particularly interested in tracing the identities of individuals or families who are the controlling stockholders.
For example, if you want to know the ultimate owner or owners of Company A, which is listed, chances are you will find them in the “Public Ownership Report” (POR) posted on the website of the Philippine Stock Exchange and the list of “Top 100 stockholders.” The latter is more detailed than the former. Both reports are filed quarterly with the PSE and the SEC.
For illustration, let us take a look at the Ayala group, which is controlled by the Zobel family. Ayala Corp. (AC) is easier to analyze because it has only two stockholders with combined holdings of 61.17 percent. Mermac Inc. and Mitsubishi Corp. own 50.65 percent and 10.52 percent, respectively. The former is the unlisted holding company of the family while the latter is their long-time Japanese partner.
But it is in your wanting to know who owns what in Mermac that will lead to the SEC, where you will start to experience the agony of going over corporate files and spending more than the amount you had initially budgeted for your research. Remember, you are only after ONE holding company, which is AC, but to learn the whole story, not necessarily the history, you need to go over a number of corporate files at the SEC library.
Agony No. 1: Unlimited expense. You have to go to the SEC’s cashier section and pay at least P700 for a computer-generated form that gives you access to the SEC’s computerized corporate files. Then you replenish the amount as you go deeper into your research because the first document that you should look for is the general information sheet (GIS), which lists Mermac’s stockholders.
Agony No. 2: Layers of ownerships. Mermac’s GIS lists 10 individual stockholders, each holding a nominal share each but their final holdings in the company are held by holding companies owned by each of the members of the Zobel family.
Agony No. 3: More expenses. If you want to know who owns which holding companies own Mermac, you—again—have to pay more for each of the corporate stockholders listed in Mermac’s GIS. Due Diligencer counted nine such corporate stockholders.
Imagine the money and the time you have to spend just to satisfy your curiosity in learning Mermac’s ownership details! By the time you have accessed and obtained a printout of the company’s GIS, you would have spent a big portion of your initial P700 expense. It’s time to go back to the SEC cashier for “unlimited,” meaning longer, access to the SEC’s computerized corporate files but you have to pay more.
Don’t worry about the big expense. The SEC issues government receipts.
From here on, keep your SEC’s access form intact and well funded because you can use the balance in it for your future trips to the SEC. You can also spend it elsewhere such as in internet cafes because your broadband at home may be too weak for your research.
Due Diligencer’s next piece: What to look for in corporate files that make research expensive.