Lopez-owned FPHC sues BIR’s Henares

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Emeterio Sd. Perez

Emeterio Sd. Perez

GOKONGWEI Brothers Foundation Inc. owns 1.997 billion common shares in JG Summit Holdings Inc., the listed flagship holding company of businessman John Gokongwei Jr. and his family. Its holdings represent 28.46 percent of JGS’s 7.017 billion outstanding shares. At JGS’s closing price of P65.40 on Monday, the huge block had market value of P130.609 billion that day.

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A recent public ownership report (POR) dated January 14 also listed Mr. Gokongwei, the patriarch, as direct owner of 821.537 million JGS shares, or 11.71 percent. Add to this 141.03 million JGS shares, and his personal stake in the holding company totaled 962.567 million shares, or 13.717 percent.

The final tally of 962.567 million shares, valued at P62.952 billion at P65.40 per share, is shown in a statement of beneficial ownership report, of which 141.03 million shares are credited to “John Gokongwei Jr. &/or Lance Gokongwei.” Apparently, this block also belongs to Mr. Gokongwei being included in his statement of beneficial ownership.

Incidentally, while the foundation’s holdings remain intact, Mr. Gokongwei reported a recent sale of 145.65 million shares at P61 per share. The sale reduced his direct ownership in JGS to 816.917 million shares, or 11.405 percent, as of Jan 31. At P65.40 per share, his remaining holdings had paper value of P53.426 billion.

BIR harassment?
HERE is how Kim Henares, who is the chief tax collector of Malacañang as

Commissioner of the Bureau of Internal Revenue, could easily frighten taxpayers into submission.

Instead of acting with dispatch on a taxpayer’s plea, for reasons only Henares knows, she dilly-dallies in performing her assigned task.

That was what happened to First Philippine Holdings Corp. (FPHC), which was forced to file “a petition for review with the Court of Tax Appeals” in which the company “is questioning the validity of the different items under the assessment amounting to P1.5 billion on factual, due process and legal grounds.

“To protect itself from the uncertainties of a prolonged and hanging assessment by the Bureau of Internal Revenue for Taxable Year 2009, FPHC has filed a petition for review with the Court of Tax Appeals,” the Lopez-controlled listed company said in a disclosure.

FPHC said it needed to go to court to force Henares to act on its “timely protest to BIR’s Formal Letter of Demand and Final Assessment Notice” that “has not been acted upon.”

Reallocation of rights proceeds
LEPANTO Consolidated Mining Co. has reduced its allocation of P700 million for its exploration program by P200 million, which, in turn, it plans to use “for additional working capital,” according to Odette A. Javier, vice president and assistant corporate secretary.

Earlier, Lepanto implemented a 1:5.5 stock rights offering to existing stockholders. The offer covered more than 7.902 billion shares at P0.20 per share, which would gross the mining company P1.58 billion. It said in a PSE posting that it would use the proceeds “to fund exploration work and working capital and to settle accounts with suppliers, service providers and related parties.”

Under the rights offering, a Lepanto stockholder is entitled to subscribe to one share at P0.20 for every 5.5 shares he or she owns.

As of March 17, Lepanto had 30.82 billion outstanding shares with free float level of 81.44 percent. Foreign ownership of Lepanto shares has no limit, meaning 0 percent, according to the PSE website detailing the company’s capital profile. (Should 0 not be 40?)

Incidentally, Lepanto remains the only listed company whose capital stock is classified as A shares—30.809 billion – and B shares—20.546 billion.

The classification into A and B of capital stock has long been discouraged by the Securities and Exchange Commission during the chairmanship of lawyer Perfecto Yasay Jr.

Preferred ‘borrowings’
DO market investors feel the effect on the earnings of their common share holdings the payments of interest that listed companies pay their preferred shareholders? Don’t they know that dividends on common shares are limited by preferred shares as an entry under equity instead of being treated as debts or liabilities?

Because these companies define preferred shares as part of their capital stock, they pay the holders not interest but dividends that are sourced from retained earnings. No one knows when this anomalous practice will end because even the Securities and Exchange Commission tolerates the sourcing of preferred shares, which are strictly borrowings, from a company’s surplus or retained earnings.

Here are two examples:
Ayala Corp. grossed P13.5 billion from the issuance of preferred B shares, of which 20 million remains outstanding. Minus expenses, net proceeds of P13.424 billion were reported, which the company said it has already used up by paying bank loans and corporate notes of P13.109 billion. It spent only P314.89 million for “general working capital.”

San Miguel Purefoods Inc., a unit of San Miguel Corp., redeemed on March 3, 15 million preferred shares it issued on March 3, 2011 at P1,000 each, This means it has already spent the “entire P15 billion proceeds” from its issuance of Perpetual Series 2 Preferred shares to the public.

esdperez@gmail.com.

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4 Comments

  1. Othello Dalanon on

    BIR’s Kim Henares, the Queen of Lies, bullies small taxpayers, constantly pesters Pacquiao, and actively prosecutes those are not allies of the Aquino administration; but fears, coddles and lawyers for Dunkin’ Donuts company – a BIGTIME TAX CHEAT!!! – whose secretary is MARIXI PRIETO who also happens to be the chairperson of Philippine Daily Inquirer (PDI) and kkk of PNoy, according to BIR Deputy Commissioner Estela Sales. please read also http://www.othelloedalanon.blogspot.com

  2. If we want to significantly lower our taxes we have to do away with most of our subsidies and social programs that do not earn for themselves but swallow up our hard earned money that go to taxes and only to spit out poop. We have to focus on job generation and limit spending.

    In McCulloch v. Maryland, Chief Justice John Marshall, who wrote the majority opinion, held “That the power to tax involves the power to destroy[… is] not to be denied.”

  3. Eddie de Leon on

    Kim Heraes and the BIR will are now screwing the Lopezes because ABS-CBN with its monster media power is beginning to have anti-Aquino Corruption and Aquino Stupidity anchor men, like Ted Failon and a few others. Soon these Lopez people wil;l be calling for Aquino to resign and help start a People POwer movement!
    The Henares-BIR action will hold the Lopez media in check.