In one Due Diligencer column a long time ago, I wrote about how expensive it was to do research on a company based on documents filed with the Securities and Exchange Commission (SEC). This time, I am focusing more on the difficulty of the reverse process of tracing back the final owners of a listed company based on the filings.
Let me just digress a little bit. I had written about the use of PCD Nominee Corp. as record stockholder in behalf of beneficial owners. This alone would tend to mislead the public on the ownership profiles of listed companies. How can the public fully appreciate the listed stocks when the companies that had issued them hide, even if unintentionally, the identities of the true business owners under thick layers of a corporate ownership structure?
For instance, San Miguel Corp. used to belong to the food, beverage and tobacco sector. It is now grouped with holding companies, along with Top Frontier Investment Holdings Inc., which, as SMC’s majority stockholder, owns 1.573 billion SMC common shares, or a 66.09 percent stake, according to a filing.
Robinsons Land Corp. made a similar posting on the Philippine Stock Exchange website. In a public ownership report (POR), it named JG Summit Holdings Inc. as beneficial owner of 2.496 billion common shares, or 60.97 percent. This ownership makes RLC a subsidiary of JG Summit, which is the listed holding company of businessman John Gokongwei Jr. and his family.
Robinsons Land and SMC are not the only listed companies; they also have their own subsidiaries. Others have almost the same ownership profiles that would make it difficult for the public to trace who owns what and how many shares.
Businessmen Ramon S. Ang and Inigo U. Zobel, as the controlling stockholders of Top Frontier, and the Gokongweis, are cited here to illustrate the difficulty of tracing the ownership of listed companies, particularly that of Metro Pacific Investments Corp. (MPIC).
As listed companies, SMC and JG Summit are both parents to a number of subsidiaries, which, in turn, have also their own units under them. Like them, MPIC, as a parent company, reports a long list of subsidiaries under it.
As known to public investors who trade on listed stocks, Robinsons Land belongs to the JG Summit Group, which may also be identified as one of the companies under the Gokongwei group. Similarly, they could also treat SMC as the SMC group or conglomerate, as it used to be identified in news reports as a food and beverage conglomerate.
If there is a Gokongwei group or an SMC conglomerate, is there also an MVP group of companies?
The question is posed here because the public investors may be misled into believing that the First Pacific group is the same as the MVP Group. If the latter is the same as the former, then Due Diligencer has always been wrong in identifying the MPIC, the Manila Electric Co. and PLDT as units of First Pacific, either directly or indirectly.
By the way, MVP stands for Manuel Velez Pangilinan, who is chairman of Metro Pacific, PLDT Inc., and Manila Electric Co., among a long list of First Pacific-controlled Philippine companies whose corporate stockholders are identified as Filipinos. That is through the use of a thick-layered ownership structure.
Incidentally, the SEC uses the files submitted to it by private companies for reference only. It does not see any value in them by going over any of the stock corporations’ list of stockholders to know if it is covered by the 60-40 percent ownership requirement in favor of Filipinos.
Do public investors know anything about Pilipinas Pacific Enterprise Holdings Inc.? If not, they should be told that this company is the ultimate owner of the First Pacific subsidiaries in the Philippines.
In an old but still available SEC filing in 2013, Pilipinas Pacific told the commission that its authorized capital stock consisted of 1.155 billion shares, of which 495 million were common and 695.996 were preferred.
Of its authorized capital stock of 1.155 billion shares valued at P660 million, three Filipinos owned 180.004 million preferred shares in Pilipinas Pacific with par value of P0.25, while three foreigners held 120.003 million common shares.
In the same SEC filing, Pilipinas Pacific named Pilipinas Enterprise Management Holdings Inc. as holder of 180.004 million preferred shares or 60 percent, which assigned a nominal share each to MVP and lawyer Ray C. Espinosa. The three foreigners who owned the common shares were First Pacific Enterprise Holdings B.V., a Dutch company, which held 120.003 million Pilipinas Pacific common shares, or 40 percent; Robert C. Nicholson and Edward A. Tortorici, with one share each.
Here is the poser for SEC officials: Is it correct that Pilipinas Enterprise Management Holdings is a Filipino company? Just asking.