Why pick on Del Monte Philippines?



AS Due Diligencer suggested a few years ago, elected politicians should keep their hands off companies that are listed on the Philippine Stock Exchange. They became legislators to make laws and not to turn the Senate and the House of Representatives into subsidiaries of the National Bureau of Investigation. (NBI).

As lawmakers, these senators and district representatives should have known that in making Congress an NBI unit, they may be placing themselves under the jurisdiction of the Department of Justice.

If the more corrupt among legislators only want to share from the profits of businesses, they should not do it at the expense of listed companies in which the public investors are also stockholders. Why not go direct to the business owners and partake of the cash dividends that they receive every now and then?

Let me go to specifics. A plunder complaint was filed with the Ombudsman by a certain Danilo Lihaylihay against Commissioner Caesar Dulay of the Bureau of Internal Revenue (BIR) and 17 other officials and personnel. If his allegations are true, by all means they should be investigated.

But first things first. Lihaylihay should tell the public how he concluded that “Del Monte was taxed P21 billion for 2011 but this was lowered to P14 billion when Dulay assumed office and after a supposedly anomalous reinvestigation.” He should have told the public the revenue Del Monte’s Philippine unit generated in 2011.

Local unit
Del Monte Philippines is only one of the subsidiaries of Del Monte Pacific Limited. It is not the listed company. Its parent is.

For the information of Lihaylihay and of the lawmakers, SGV and Co. is the external auditor of Del Monte Pacific, the listed company. While the financial performance of Del Monte Philippines is included in the consolidated audited financial reports filed by Del Monte Pacific, it also files its own audited financial statements with the Securities and Exchange Commission.

As a listed company, Del Monte Pacific is covered by the full disclosure rule. In a public ownership report (POR) as of April 12, it attributed to the public the ownership of 621.106 million shares, or 31.96 percent.

With their ownership of close to 32 percent of outstanding capital stock, the public should have been entitled to at least two seats in the eight-person board of Del Monte Pacific. They are not. Instead of allowing the public to elect their nominees, the company’s eight-person board is divided into four regular directors and four independent directors.

In the same POR, Del Monte Pacific named two principal stockholders. NutriAsia Pacific Ltd. and Bluebell Group Holdings Ltd. own 1.155 billion shares, or 56.44 percent, and 148.227 million shares, or 7.63 percent, respectively.

Public stockholders
Politicians are better reminded that investigating listed companies unnecessarily also hurts the public investors who may also be stockholders. Speaker Pantaleon Alvarez and his fellow members know this.

Ironically, it seems the Lower House of the two-chamber legislature engages less in making laws and more as an investigator of private companies. Instead of requiring Del Monte Pacific and its local unit to justify its tax payments, Alvarez should have studied his lessons before issuing statements and press releases.

It is not the duty of a corporate taxpayer to explain to Alvarez how it paid only so much in taxes. Let the BIR do the inquiry. If both he and his informer were serious in going after alleged tax cheats, how come they failed to provide the public the taxable income on which was computed the alleged tax assessment against Del Monte Philippines?

Alvarez should disclose to the public the revenues and the resulting net profit that Del Monte Philippines registered in 2011, and possibly in other years. He should not be like the BIR, which omits from its website the personal income and revenues of individual and corporate taxpayers, respectively.

Due Diligencer’s take
Members of the House of Representatives should make public their compensation by including their salaries and expenses among the reports collated by the Commission on Audit (COA). Based on this report, the public would know how some, if not all its members, could at the same time afford the lifestyle of the very rich and famous.

As the government independent auditor, COA used to include the salaries of legislators in its audit reports. Unfortunately, it does not do this anymore for reasons known only to COA and the lawmakers.

For the sake of the public who are interested in how the government spends other people’s money, COA should also post on its website the expenses of lawmakers and possibly of the Office of the President.

By the way, if Alvarez and his allies in Congress are interested to know how much Del Monte Philippines has been earning, they should start their lessons in accounting by going over the audits conducted by the company’s external auditors. The numbers alleged by Alvarez’s informer should tally with these audit reports.

Who, by the way, is Lihaylihay? Did he write COA seeking more than P3 billion as his reward for his alleged past exposé of unpaid taxes? Just asking.



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