Malacañang takes over PNCC

Emeterio Sd. Perez

Emeterio Sd. Perez

WILL somebody in Malacañang explain to the public investors the implication of Executive Order (EO) 141 placing Philippine National Construction Corp. (PNCC) under the Office of the President (OP)?

The transfer of what could be “regulatory” supervision over PNCC from the Department of Trade and Industry (DTI) to the OP came at a time when the construction company is being privatized, although past biddings have failed. The questions that beg for answers are many such as what would happen to the sale of PNCC to the highest bidders.

Yes, the government has always been PNCC’s majority stockholder, but isn’t it surprising that the Aquino administration would take an interest in the company that is losing and had piled up huge deficits of P9.74 billion as of June 30, 2013? What does Malacañang intend to do with this huge amount of accumulated losses and PNCC’s over P11-billion liabilities? Will the President be able to bring the company back to profitability, wipe out its deficits, and pay its mounting debts?

No one knows the real reason or reasons behind the President’s sudden interest in PNCC. But one thing is certain: the public stockholders may own only 22.90 million shares but they would want top be told what President Benigno Aquino 3rd’s plans are for the construction company.

In fact, PNCC’s individual stockholders would be left in the dark as to Malacañang’s intention in taking away jurisdiction over the company from the Department of Trade and Industry. They would surely fear the President’s takeover because with the company under Malacañang, they would never know what the future holds for them and their PNCC shares.

Whoever had thought of placing PNCC under President Aquino must have some hidden agenda? If he or she or they did not have a personal interest in the company, why disturb the market? How could the public now monitor the developments inside PNCC’s boardroom when its members are being closely watched and monitored by Executive Secretary Paquito Ochoa, a senior partner of law firm with an easy-to-remember acronym MOST, and other temporary occupants of Malacañang?

With the information about PNCC limited to a few Malacañang insiders, it is also possible that the public could be deprived of any developments inside the boardrooms. Will lawyer Elpidio Jamora, the new chairman, and other President Aquino nominees in the company, file the regulatory disclosures without Mr. Aquino’s blessings?

It is only prudent to give Jamora and company the benefit of the doubt. Still, the public investors need to know from them if they would be updated on every move of the Malacañang temporary occupants on PNCC. Will they act independently when they have probably been elected to the board with the blessings of the President?

With the issuance of EO 141, which President Aquino signed on October 14, 2013, PNCC has virtually been hidden from the public. Will the first official corporate act of Malacañang be to take PNCC private again, a move that would finally give those with vested interests in the company to do whatever they had planned when they conceived of the company’s transfer to Malacañangs from DTI?

Delisting PNCC is not a remote possibility since it has been violating the rule of the Philippine Stock Exchange requiring minimum public ownership of 10 percent of outstanding shares in listed companies. Its three significant stockholders have combined holdings of 151.54 million shares, or 86.87 percent. These are Government Service Insurance System, 47.49 million shares, or 27.22 percent; Republic of the Philippines, 79.27 million shares, or 45.44 percent; and Universal Holdings Corp., 24.78 million shares, or 14.21 percent.

The ownership profile shows nothing in the name of Ochoa or any other Malacañang insiders. Yet, PNCC has been placed under their jurisdiction, sending the wrong message to foreigners who trade on listed stocks that they are never safe from government meddling. It is only in the Philippines that this is happening and it is happening only under the Aquino administration.

Finally, who will regulate the President by requiring him to disclose his plans about PNCC? Definitely, no one among the officials of the Securities and Exchange Commission (SEC) would dare ask their boss to comply with the stock market’s full disclosure rule. After all, the SEC is also under the Office of the President.


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