• PLDT’s ownership profile makes MVP its biggest ‘corporate voter’ and nominee

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    Emeterio Sd. Perez

    Emeterio Sd. Perez

    THE Indonesian-owned First Pacific Co. Ltd. and the NTT Group of Japan own 55.245 million common shares, or 25.57 percent, and 43.964 million common shares, or 20.35 percent, respectively of the outstanding common shares of Philippine Long Distance Telephone Co. Together, these significant foreign stockholders control 45.92 percent of PLDT’s outstanding common shares.

    As shown in previous Due Diligencer pieces, foreigners, led by First Pacific and NTT Group, control 116.002 million PLDT common shares, or 53.691 percent, which is way above the 40-percent limit foreigners are legally allowed to own in public utilities and other industries. Does this make PLDT a violator of the law?

    As shown in previous Due Diligencer pieces, foreigners, led by First Pacific and NTT Group, control 116.002 million PLDT common shares, or 53.691 percent, which is way above the 40-percent limit foreigners are legally allowed to own in public utilities and other industries. Does this make PLDT a violator of the law?

    As far as the Securities and Exchange Commission (SEC) is concerned, PLDT’s ownership profile may be unique but legal. Having been ordered by the Supreme Court to look into the company’s ownership profile that exceeds the 40-percent legal limit, the SEC approved PLDT’s issuance of 150 million voting preferred shares to PLDT Beneficial Trust Fund to dilute its foreign ownership, reported at 87 percent, of common voting shares.

    Since PLDT has also issued 300 million non-voting preferred shares, it had total outstanding shares of 666,055,775. This is what makes its ownership profile unique because computing the ownership ratio between Filipinos and foreigners by using 666.056 million shares would show the dilution of the latter’s 53.691 percent control to 17.416 percent. Would this make Filipinos the majority stockholders since they would control 82.584 percent?

    But a different computation based only on voting capital stock would show a different result that would be adverse to PLDT. This would mean 666.056 million shares minus 300 million shares equals 366.056 million shares of outstanding voting capital stock, which in turn is divided into 216.056 million common shares and 150 million voting preferred shares.

    Finally, it is up to the SEC to review the list of PLDT’s top 100 stockholders owning common shares as of June 30, 2014, which is the latest ownership filing. Its examiners should focus only on PCD Nominee Corp., JP Morgan Asset Holdings (HK) Ltd., NTT DoCoMo and NTT Communications which together account for a combined 115.30 million of the company’s outstanding common shares. If they would arrive at 53.366 percent, then that would confirm Due Diligencer’s computation. But if they would come out with legally allowable limit of 40 percent or even less, they should justify their findings.

    Here is how to count the foreigners’ PLTD common share holdings: Try adding the numbers as they appear opposite the names of only four stockholders and their nationalities. As of June 30, PLDT’s top 100 stockholders owning common shares included PCD Nominee Corp., which held, for “various” nationalities, 36.570 million shares or 16.926 percent; JP Morgan Asset Holdings, Hong Kong, 43.299 million shares or 20.04 percent; NTT DoCoMo, Japan, 22.797 million shares or 10.55 percent, and NTT Communications, Japan, 5.85 percent.

    Due Diligencer’s ratio of 53.366 percent is, of course, based only on PLDT’s 216.056 million outstanding common shares. Computed on 366.056 million outstanding voting shares, the foreigners’ 115.30 million common shares would be equal to 31.498 percent, the dilution effected by the issuance of 150 million voting preferred shares.

    Perhaps something went wrong somewhere with Due Diligencer’s addition that it arrived at a sum of 115.30 million common shares held by foreigners based on the June 30, 2014 listing of PLDT’s top 100 stockholders. In a public ownership report, also as of June 30, 2014, PLDT listed only 116.002 million foreigner-owned common shares, the number used in previous Due Diligencer computations.

    At the same time, PLDT reported public ownership of 53.85 percent by dividing 116.354 million common shares by 216.056 million outstanding common shares. Such percentage would make the public PLDT’s majority stockholders when they are not even represented in the board.

    As a matter of fact, Manuel V. Pangilinan, PLDT chairman, is probably the biggest “corporate voter” as he votes not only the common shares owned by the corporate vehicles of First Pacific but also the 150 million voting preferred shares of PLDT Beneficial Trust Fund, which is identified as a Philippine corporation but which is not an SEC-registered stock corporation. Will SEC Chairperson Teresita Herbosa identify the fund’s stockholders for the sake of the public? Next piece: Foreigners’ control of PLDT’s dividends.

    esdperez@gmail.com

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