Listed firm’s new owners lack ART of full disclosure

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perez

OWNERSHIP profile. As of March 31, 2013, four stockbrokers held 44.712 million shares, or 72.407 percent (listed at 80 percent in the filing) of 61.750 million outstanding shares of Touch Solutions Inc. These were Fidelity Securities Inc., 37.333 million, or 60.458 percent (listed at 67 percent); BDO Securities Inc., 4.427 million, or 7.169 percent (listed at 8 percent) and Venture Securities Inc., 2.952 million, or 4.780 5 percent (listed at 5 percent).

The same ownership filing showed seven directors and executive officers owned 33.331 million shares, or 53.978 percent (listed at 59.35 percent).

Of the seven, two were significant stockholders, namely Anson Uy with 19.278 million shares, 31.948 percent, of which he directly owned 18.973 million shares, and John Tiu with 12.634 million shares, 20.460 percent.

Premium over par. Touch Solutions grossed P161.539 million including additional paid-in capital (APIC) of P99.789 million, from the sale of 61.750 million shares. This translates to an average issuance price of P2.616 a share, for premium of P1.616 over par value of P1 per share.


Of TSI’s 61.750 million outstanding shares, 15 stockholders used to own 43.225 million, or 70 percent until a new group came in, bought them out, and is making an offer to acquire the remain TSI shares, equivalent to 30 percent of outstanding, held by the public.

The deals, which grossed the sellers P280.098 million at P6.48 each, were consummated through a block sale on June 13, 2013. The proceeds would make the stockholders richer by P3.864 a share based on their average acquisition price of P2.616 a share.

ART of full disclosure. All this is being told here because of the dramatic overhauling of TSI’s ownership profile following the takeover by a foreign company.

Such takeover, however, has not been made to be transparent, depriving the public stockholders of complete information that would make them know what’s in store for them.

But it seems, like the past backdoor listings, TSI and its new majority stockholders have been making disclosures just enough to comply with the rules on transparency as determined by the Securities and Exchange Commission (SEC).

In effect, if the SEC and the Philippine Stock Exchange (PSE) could be tolerant of piecemeal filings, why should backdoor listing entities file more than what is necessary? Why not forget all about the ART of full disclosure where “A” stands for accurate, “R” for relevant and T for timely?

Tender what? Since April this year after the 15 stockholders accepted Shiok’s offer to buy them out, nothing has been disclosed yet as to what the buyer planned to do with TSI.

The public have been told only that as the new majority owners, Shiok group would comply with the rules of the Securities and Exchange Commission to buy out them out at the same price that they earlier paid 15 stockholders.

Definitely, the public investors could presume that TSI as XYZ Corp. won’t engage in property development because Shiok already owns 70 percent of TSI and intends to increase this ownership to 100 percent.

Then, if Shiok plans to use XYZ as its holding company in the Philippines, why not? It may be allowed to own 100 percent of XYZ provided XYZ would not invest in companies engaged in partially nationalized industries such as oil exploration and mining.

Guess what? In failing to observe full disclosure through omission, TSI and Shiok are driving the public investors into engaging in speculation.

Shiok disclosed its identity only as “a corporation organized in 2006 under the laws of Singapore” but did not specifically mention that it is owned by Singaporeans. It is now up to the public to guess its owners’ nationality or nationalities.

Besides, Shiok listed only its managing director whom it named as Peter YB Tay, a Singaporean who holds the post as managing director.

If Shiok as a BVI-registered entity is a stock corporation, then it should have stockholders, who elect the members of the board, who, in turn, appoint the top executives.

The SEC and PSE may not necessarily be clueless about Shiok but how about public, be they traders, minority stockholders, or daily investors who may want to ask: Did Shiok take over TSI, a listed company, without knowing what it intended to do with it?

esdperez@gmail.com

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