IN reporting the ownership profiles of listed companies, Due Diligencer uses the general information sheets (GIS) posted on the website of the Philippine Stock Exchange (PSE) with little variation. While Filipino stockholders are listed as the majority stockholders, I deduct the number of shares held by the majority or principal stockholders. This way, our readers will know how much the public investors own, allowing them to compare their holdings with those of the principal owners.
It may also be necessary to segregate the holdings of stockholders related to the majority owners. By doing so, the public investors will also know if there is a need to raise the 10-percent minimum public ownership rule.
For instance, the 2016 GIS of Aboitiz Equity Ventures Inc. (AEV) listed 9,054 stockholders as Filipinos, who owned 5.07 billion common shares or 89.99 percent of the total. It also disclosed that 83 foreigners held the remaining 564.182 million AEV common shares, or 10.01 percent.
Aboitizes and allies
Of the 5.07 billion AEV common shares owned by 9,054 Filipinos, Aboitiz and Co. and Ramon Aboitiz Foundation held 2.735 billion common shares, or 49.252 percent, and 424.539 million common shares, or 7.643 percent. These two stockholders alone, as listed on the GIS, had a combined 3.14 million common shares, or 56.895 percent.
Such ownership profile will make AEV more public than others, when it is not. Aboitiz and Co. owned 2.736 billion common shares, or 49.252 percent, while individually, the Aboitizes, along with eight of their allies, held directly or indirectly 297.511 million common shares, or 5.281 percent. These shares totalled 3.034 billion common shares, equivalent to 54.533 percent.
With only a majority ownership of 54.533 percent, the Aboitizes would not have controlled AEV’s eight-person board. Some, if not most of their holdings, could have been lodged either with PCD Nominee Corp. or various other corporate stockholders.
The company’s GIS listed “Others” at No. 24 as owners of 695.909 million AEV common shares, or 12.529 percent.
On Mrs. Gotianun’s acquisitions
A reader of The Manila Times reacted to Wednesday’s Due Diligencer regarding the acquisition by an insider of shares in Semirara Mining and Power Corp. He was curious to know if Maria Cristina Consunji Gotianun took advantage of her membership in the 10-person board when she bought additional Semirara shares in anticipation of a 300-percent stock dividend.
The reader wrote that Mrs. Gotianun, an insider and director, could have known that Semirara had yet to announce the record and payment date of the stock bonanza, which were all subject to board approval. As a member of the board, she knew when the board would meet to set the record date of the 300-percent stock dividend.
Mrs. Gotianun is not only an insider and director. More importantly, she is a member of the Consunji family – the majority stockholders of Semirara. This makes her one of the owners of the company.
As executive vice president, Mrs. Gotianun is also an executive director of Semirara’s various subsidiaries.
All this, however, has been fully disclosed to the public in various postings on the PSE website. Mrs. Gotianun acquired 17,500 Semirara shares at P159 each and 940 shares at P158 each.
The Securities and Exchange Commission (SEC) and the PSE should closely monitor the agenda of the meetings of the company’s board.
Specifically, did Mrs. Gotianun know when the board of Semirara would approve the record date of the company’s 300-percent stock dividend? It is up to the regulatory authorities to determine the proximity of the board approval and the acquisitions of Semirara shares by Mrs. Gotianun.
For the information of our reader, Due Diligencer took up in a previous piece the “buy trades” of Mrs. Gotianun for the enlightenment of the public investors about insiders’ transactions on the listed shares of the company or companies that they own.
Due Diligencer’s take
Something is wrong with the GIS. By grouping the majority stockholders and their allies with Filipinos, the filing tends to mislead the public investors-turned stockholders that they are the principal stockholders.
To correct a possible misinterpretation, it is about time the SEC and PSE amend the entries in the GIS by providing a separate entry for the controlling stockholders and corporate stockholders allied with them. This may be one of several ways to fully inform the public investors of the ownership profiles of listed companies.
In the case of AEV, Due Diligencer chose only two significant stockholders to illustrate the need for a more informative GIS.
By the way, if it is also possible, would the SEC require listed companies to disclose the relationships between their majority or principal owners and their other corporate stockholders?
Due Diligencer came out with a reader’s reaction to explain the issues surrounding the acquisitions of Semirara shares by a company insider. While it was clear that Mrs. Gotianun bought shares in the company that her family owns, it is up to the SEC to determine if she had violated any of the market rules and regulations. Did she know the schedule of the board meeting that approved the company’s 300-percent stock dividend? Just asking. We welcome replies from the SEC, as well as Mrs. Gotianun herself, for the information of the public.