IF the Securities and Exchange Commission and the Philippine Stock Exchange cannot change the accounting rules on the continued treatment of preferred shares as equity or part of it, the least their officials and executives can do is to give the holders of common shares preference over the retained earnings of listed companies.
The majority stockholders may not worry at all about the use of accumulated net profits for paying preferred shareholders “dividends.” After all, they are mostly families who stand to benefit more from the proceeds of the issuance or sale of preferred shares.
If only SEC officials would read ownership filings, they would know that in some instances, the holders of preferred shares are either sister companies or affiliates of listed companies. In other words, families or company insiders are the priorities in sale or issuance of preferred shares. How about the public investors?
In the first place, it is the public who enable family-owned-and-controlled corporations to raise money for expansion, and in some cases, pay maturing debts. The latter, of course, meant taking advantage of the public that the SEC should not continue tolerating.
In fact, the SEC should require full disclosure of the identities of holders of preferred shares.
Remember that banks’ loans earn interests, but dividend should not be expressed in percent because there is no such thing as six percent – may be even higher – dividend.
Name it, AEV has it
ABOITIZ Equity Ventures Inc. “is the public holding and management company of the Aboitiz Group of Companies.” Its core businesses “are grouped into five main categories: power distribution, generation and retail electricity supply, financial services, food manufacturing, real estate, and infrastructure.”
In addition, AEV “also has portfolio investments that include holdings in aviation through AEV Aviation Inc.,
production of biogas through AseaGas Corp., underwriting of insurable risks of AEV through Archipelago Insurance Pte. Ltd., and bulk water treatment through Apo Agua Infrastructura Inc.”
The website of the Philippine Stock Exchange which carries the above information also listed AEV’s significant subsidiaries such as Aboitiz Power Corp., Pilmico Foods Corp., and Aboitiz Land Inc.
AEV, according to a general information sheet (GIS) the company filed with the Securities and Exchange Commission, has authorized capital stock of 10 billion shares divided into 9.6 billion common shares and 400 million preferred shares. Both classes have par value of P1 each.
Of AEV’s 5.556 billion outstanding common shares as of July 18, Filipinos, totaling 9,188 owned 4.968 billion common shares, or 89.42 percent, and 91 foreigners held 587.955 million common shares, or 10.58 percent.
As of Dec. 31, 2015, AEV has not issued preferred shares.
Aboitiz & Co. Inc., an unlisted company of the Aboitiz family, topped the list of AEV’s 100 stockholders with 2.736 billion common shares, or 49.252 percent. Aboitiz Foundation Inc. owned 424.539 million common shares, or 7.64 percent.
PCD Nominee Corp held 608.836 million common shares, or 10.95 percent, and 583.611 million common shares, or 10.5 percent, for Filipinos and foreigners, respectively.
Majority and principal stockholder
AEV, as the holding company of the Aboitiz family, controls 5.658 billion common shares, or 76.88 percent, in Aboitiz Power Corp). In turn, Aboitiz & Co., AEV’s principal stockholder, holds 146.473 million APC shares, or 1.99 percent. Company insiders led by the Aboitizes, own 125.207 million common shares, or 1.7 percent.
While AEV is not the majority stockholder of Union Bank of the Philippines (UBP), it is a principal or substantial stockholder, along with Insular Life Assurance Co.
A public ownership report listed AEV as owner of 516.763 million UBP shares, or 48.83 percent and Insular Life as holder of 171.598 million UBP shares, or 16.21 percent.
With 725.617 million UBP shares, or 68.56 percent, classified as “non-public,” the same POR credited the public with 332.727 million UBP shares, or 31.44 percent.
In a separate ownership filing, UBP listed the Social Security System as holder of 11.132 million shares, or 10.88 percent. Emilio S. de Quiroz Jr., SSS president and chief executive officer, is a member of UBP’s 15-person board.