|
TWO foreign financial services firms will present proposals before
the Philippine Stock Exchange (PSE) board in the coming days
providing for a broader ownership base of the local bourse.
Francis E. Lim, PSE president and chief
executive, said UBS and JP Morgan, two of the five firms that were
shortlisted, would submit proposals on how to address the issue of
bringing the ownership or voting rights of its member-brokers from
45-percent down to 20 percent.
As a listed firm, the PSE has been paying
penalties to the Securities and Exchange Commission (SEC) since July
20 last year after failing to comply with a Securities Regulation
Code (SRC) provision that seeks to limit the direct and indirect
ownership or control of voting rights of any industry or business
group to 20 percent.
Lim said he may ask the SEC for another
extension of the July 20 deadline for complying with the law. The
PSE board has been asking the SEC to extend the deadline, adding it
has been trying to convince the member-brokers to sell their stake
through a secondary offering or through an issuance of new common
shares to dilute their ownership and accommodate private placement.
Another option that the local bourse has
proposed to its majority shareholders is to conduct an initial
public offering of PSE common shares or an issuance of voting,
non-convertible, cumulative, redeemable and non-participating
preferred shares. A third option is to offer PSE employees a stock
option plan.
However, the only way the board can dilute the
brokers’ shareholdings is by waiving their preemptive rights,
which they refused to do. A preemptive right gives an existing
company stockholder an option to subscribe to any stock issuance of
the company before the same stock can be offered to other parties.
This right helps an existing stockholder maintain a proportionate
voting strength in the company.
Lim earlier said that because of this deadlock
between the board and the brokers, a legal battle between the SEC
and the PSE may be in the horizon as the two bodies may have to
settle the issues in court.
At present, the PSE is studying an option
offered by the SEC to lower the voting rights of the brokers to the
prescribed level percent while still maintaining same level of
shareholdings in the bourse.
-- Likha C. Cuevas-Miel
|
