• PCD Nominee Corp.



    IS Manila Jockey Club Inc. (MJC) public as it proclaims itself to be?

    If the latest public ownership report (POR) posted by the company were to be the basis of a conclusion, then the monitoring teams of the Securities and Exchange Commission (SEC) and the Philippine Stock Exchange (PSE) may conclude that, indeed, MJC is public.

    The company’s POR as of January 16 credited the public with 781.153 million common shares, or 78.42 (rounded off from 78.416 percent) of 996.161 million shares.

    (Note: The ratios used in the POR were computed on 996,161,286 outstanding common shares.)

    As its report showed, MJC had issued 996,170,748 shares, of which 9,462 were and still are treasury shares, for outstanding shares of 996,161,286.

    The details of ownership in the ownership filing listed Arco Equities Inc. as holder of 130.795 million shares, or 13.12 percent; and 11 directors as direct owners of 84.213 million MJC shares, or 8.22 percent.

    Public as majority stockholder
    When computed, MJC came up with 215.008 million non-public shares and 781.153 million publicly owned shares. These came to a total of 996.161 million shares.

    By the way, MJC reported 996.171 million listed common shares in its POR by including 9,462 treasury shares.

    The members of the 11-person board of the Manila Jockey Club own 84.213 million shares, which represent 8.22 percent in its POR. When recomputed, the result was 8.454 percent.

    As the majority stockholder, Arco Equities directly holds 130.795 million shares, or 13.12 percent. A re-computation resulted in Arco holding the equivalent of 13.13 percent.

    The board’s holdings of 84,212,775 shares, plus Arco Equities’ 130,795,366 shares, plus 781,153,145 shares, equals 996,161,286 outstanding shares, as MJC reported in its POR.

    MJC arrived at 215.008 million non-public shares, equivalent to 21.584 percent. The percentage makes the public the company’s majority stockholder, with 781.153 million shares, or 78.416 percent.

    ‘Boardless’ public
    Despite their 78.416 percent ownership in MJC, the public don’t elect anyone to represent them in the company’s 11-person board. Instead, Due Diligencer assumes that the Reynos elect all nine regular members and appoint two independent directors.

    Another filing—a preliminary information statement (PIS) filed by the Manila Jockey Club—credited PCD (Philippine Central Depository) Nominee Corp. with 477.741 million MJC shares, or 47.96 percent of 996.171 million outstanding shares as of June 9, 2016. (Note: On the PSE website, MJC has less number of outstanding shares—996.161 million—because of the company’s share buyback.)

    The same information statement showed Arco Equities owned 98.771 million MJC shares, or 9.92 percent, with Alfonso Reyno Jr. as beneficial owner. He also directly held 65.948 million MJC shares, or 6.62 percent.

    While the Reynos control MJC’s board, the company explained PCD’s holdings as follows: “There is no actual natural or juridical person that directs the voting or disposition of the shares held by PCD Nominee Corp. Further, there is no beneficial owner of the shares held by PCD Nominee Corp. that holds or can vote on 5 percent or more of the company’s voting shares.”

    Board control
    If, as its information sheet showed, MJC’s officers and directors owned 74.645 million shares while Arco Equities held 98.771 million shares, or 9.92 percent, as of June 9, 2016, how then did the Reynos end up in control of the board?

    Didn’t they need MJC shares attributed to the PCD Nominee to enable the Reynos to control the board?

    Of course, this kind of disclosure is what the SEC and PSE monitoring teams should closely scrutinize for its confusing entries. ‘Who vote what number of MJC shares’ is the poser that has no answer as far as the public is concerned.

    Yes, the public may not care at all even if the regulatory authorities ignore their right as stockholders; but they deserve even a “semblance of courtesy” in making family-owned and controlled corporations public.

    Who were responsible for enabling these stock corporations to list their shares? Weren’t they the public who might be in the market for the purpose of earning dividends?

    A little bit of caution: The confusion that arises from certain filings is not a monopoly of Manila Jockey Club. In their own POR and other disclosures, other listed companies similarly present entries that tend to confuse rather than to enlighten the public. Who are responsible for obliging these companies to make their disclosures more informative?



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