• No board seat for public stockholders


    Emeterio Sd. Perez

    SINCE Pilipinas Shell Petroleum Corp. did not have a general information sheet (GIS) posted on the website of the Philippine Stock Exchange, Due Diligencer went over various postings for the names of the stockholders of the oil company.

    Luckily, other disclosures provided the information that Due Diligencer is sharing today with readers of The Manila Times. Starting with the definitive information statement (DIS), my search led me to other filings such as public ownership reports (POR) and the list of top 100 stockholders.

    In its latest DIS, Pilipinas Shell listed two corporate stockholders. The Dutch-owned Shell Overseas Investments B.V. held 890.86 million Pilipinas Shell common shares, or 55.215 percent; and The Insular Life Assurance Co. Ltd. owned 255.452 million common shares, or 15.833 percent.

    After Shell Overseas and Insular Life, the ranking of the top 100 stockholders and the POR listed a third significant stockholder. Spathodea Campanulata Inc. was Pilipinas Shell’s fifth biggest stockholder.

    Spathodea should have been at No. 3 after Shell Overseas and Insular Life because The Hongkong and Shanghai Banking Corp. and Deutsche Bank-Manila act only as record stockholders for certain beneficial stockholders.


    Market rules require the principal or significant stockholders to place their holdings in escrow. To comply, Shell Overseas and Insular Life deposited the shares they owned in Pilipinas Shell and were not allowed to unload their holdings from Nov. 3, 2016 to May 2, 2017.

    Even Spathodea Campanulata Inc. joined the escrow requirement although it did not own at least 10 percent of
    the outstanding common shares of Pilipinas Shell.

    Spathodea owned 67.184 million Pilipinas shares, equivalent to 4.164 percent.

    Despite its small holdings, Spathodea joined Shell Overseas and Insular Life when the two principal stockholders “physically delivered the subject common shares to the escrow agent for deposit and safekeeping during the lock-up period.”

    Rizal Commercial Banking Corp. acted as the escrow bank for the holdings of the three stockholders.

    Other stockholders

    In its POR, Pilipinas Shell listed Shell Overseas and Insular Life as principal stockholders with combined holdings of 1.146 billion common shares, or 71.04 percent. It also named in the same filing Spathodea as a stockholder, but not as principal stockholder.

    In the same POR, Pilipinas Shell classified the Government Service Insurance System under “government” as holder of 16.517 million shares, or 1.02 percent. It also named four banks, which held 66.473 million common shares, or 4.11 percent. These were RCBC, with 28.863 million Pilipinas Shell shares or 1.79 percent; Standard Chartered Bank, 21.425 million shares, or 1.33 percent; Citibank N.A., 16.097 million shares, or 0.99 percent; and Metropolitan Bank and Trust Co., 87,893 common shares.

    Pilipinas Shell credited the public with 316.248 million common shares, or 19.601 percent.

    All these stockholders including the public owned 1.613 billion common shares, which, as of the date of filing, represented the outstanding common shares of Pilipinas Shell.

    Due Diligencer’s take
    More often than not, the board of directors of listed companies decide only what is good for the majority stockholders. It excludes the public investors, who are also stockholders, from getting a seat, apparently fearful of the incursion of outsiders into what are perceived to be family affairs.

    The foremost consideration in the election of directors is the number of common shares that a stockholder owns. If this is so, why do the majority owners of listed companies appoint independent directors but do not allow the public to elect their nominees to the board proportionate to their holdings?

    The presentation of publicly held common shares in their PORs makes a number of listed companies more public than others. Petron listed its public stockholders as owning 2.235 billion common shares, or 23.84 percent. In Pilipinas Shell, public stockholders owned 316.248 million common shares, or 19.601 percent.

    If the numbers that Petron and Pilipinas Shell showed in their PORs are true, then they should give the public investors what’s due them. After all, they were responsible for getting family-owned and controlled stock corporations listed. Will the public investors unite and elect who among them are qualified to sit on the boards of listed companies? Just asking.



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