ON November 6, Manuel V. Pangilinan, who is also known by his initials MVP, increased to 246,450 the number of common shares he owns in Philippine Long Distance Telephone Co. (PLDT) after buying 1,000 shares at P2,030 per share. At the acquisition price, MVP’s holdings in the telecom giant had market value of P500.2 million. On Friday, the stock went up 5.4 percent to close trading at P2,140, increasing Pangilinan’s paper wealth in PLDT to P527.4 million.
Pangilinan was lucky with his acquisition. Among other listed stocks, he also owns 4.65 million common shares in Philex Mining Corp. At the stock’s last traded price of P5 on Friday, his PX shares made him P23.275 million richer.
Meanwhile, seven insiders at Roxas and Co. Inc. (RCI) bought a total of 121,452 common shares in what it said in a filing was “sale of treasury shares”. The details of the insider deal show the company’s generosity to said insiders, who are all members of the seven-person board.
In a filing posted on the website of the Philippine Stock Exchange (PSE), RCI said Antonio J. Roxas, Pedro E. Roxas, Renato C. Valencia, Corazon dela Paz Bernardo and Francisco R. Elizalde got 20,242 shares each while Guillermo D. Luchangco and Carlos R. Elizalde got 10,121 shares each.
In a way, RCI benefited from this act of generosity because the shares were part of the board’s compensation. Besides, at P2.47 each, the company even made a profit of P0.77 per share because it paid P1.70 per share when the company bought back 990.38 million shares from four of its stockholders on Dec. 3, 2013.
A big seller
As of Nov. 27, Aberdeen Asset Management Asia Ltd. owned 1.45 billion shares, or 9.9 percent, in Ayala Land Inc., down from 1.5 billion shares, or 10.2 percent, on Nov. 11.
Ayala Land computed Aberdeen’s ownership of ALI shares based only on 14.67 billion outstanding common shares, when its outstanding capital stock also included 13 billion voting preferred shares.
To show the correct ownership percentage, Ayala Land should have divided 27.74 billion shares of outstanding capital stock, consisting of 14.67 billion common shares and 13 billion voting preferred shares, by Aberdeen’s 1.45 billion shares.
Had Ayala Land followed this formula, Aberdeen’s 1.45 billion ALI shares as of Nov. 27 should have been equivalent to 5.2 percent, and 1.5 billion would have represented 5.4 percent of 27.7 billion shares of outstanding capital stock.
A few, if not many, listed companies are able to go around the rule on the 10-percent minimum public ownership because the Securities and Exchange Commission tolerates their methods of presenting their ownership profile. In some cases, their computations have ended up with the public as majority stockholders but without board representation.
On a more positive note, Ayala Land announced in a filing the promotions of Dante M. Abando to senior vice president from vice president, and Myrna Lynne C. Fernandez to vice president from assistant vice president. It said the promotions, which its board approved on Nov. 27, will take effect in January 2016.
Aside from disclosing these promotions, Ayala Land also included in the filing their ownership of ALI shares. Fernandez and Abando hold 606,514 common shares in ALI worth P20.68 million, and 1.41 million common shares, or P48.081 million, respectively. Their holdings were computed on ALI’s closing price of P34.10 on Friday.
In view of the misleading ownership disclosures by listed companies, the SEC must adopt a new set of rules to make the stock market truly transparent. In a previous piece, I suggested that big transactions on listed stocks should be accompanied by a PSE posting identifying both the buyers and the sellers.
The public should not be taken for granted because they would be curious to know who bought what. I also asked that the SEC and the PSE require the disclosure of the beneficial owners of big blocks of shares held by PCD Nominee Corp.
This time, I am asking the SEC to revise the computations of public ownership to include the entire outstanding capital stock and not simplify the computations by limiting them to common shares.