IT is about time for the Securities and Exchange to assert its regulatory authority over Alliance Select Foods International Inc. For the sake of the public, its officials should take the initiative to look into the company’s financials to see how the public investors’ money remain tied up with the company that has for years been operating on increasing deficit.
If SEC officials or the Chairperson Teresita Herbosa would want to know who to ask if they want to save the public their investments on the listed shares of Alliance Select, the company’s directors are Antonio C. Pacis, chairman; and George E. Sycip, vice chairman. They can also inquire about the status of the investments of the public from other regular directors – Raymond K.H. See, Joseph Peter Y. Roxas, Marie Grace T. Vera Cruz, and Dobbin A. Tan. Erwin M. Elechicon, like Sycip, is an independent director.
To complete the company files for the information of SEC officials, the PSE website also lists the top executives of Alliance Select. Aside from See, who is president and CEO, the others are Grace S. Dogilio, vice president – finance; Lisa Angela Y. Dejadina, senior vice president-business development and operational excellence; Ma. Kristina P. Ambrosio, vice president for legal, assistant secretary and compliance officer; Edward Lim Noma, assistant vice president for procurement; and Barbara Anne C. Migallos, corporate secretary.
The credentials of the executives of Alliance Select are available from filings such as the definitive information statement. From this posting, they would learn who run the company and why they should be held responsible for the its deficits in US dollar that keep surging in every financial filing.
As a matter of fact, if only SEC officials were curious enough to access from PSE website financial disclosures, they would have learned that as of Dec. 31, 2014, Alliance Select had accumulated a deficit of $14,898,404, which increased to $20,700,539 by Dec. 31, 2015 and in the following six months to June 2016 ballooned to $21,951,785.
In the past three years alone, Alliance Select’s net losses totaled $28,018,253. By year, this translates to $2,918,933 in 2013; $17,076,504 in 2014; and $8,022,816 in 2015. If you are wondering why the company’s three-year net loss was much higher than its reported deficit as of end-2015, better ask Sycip, who, as an independent American director, should know the answer.
By the way, the dollar sign preceding the amount of loss is not a typographical error. Alliance Select prefers US dollar to Philippine peso as functional currency in its financial filings. When converted into peso, the three-year net loss is equivalent to P1,316,857,891.
Despite losing P1.317 billion from 2013 to 2015, Alliance Select paid its “CEO and the four most highly compensated officers” salary of P10.723 million and bonus of P891,000 in 2014; P12.998 million and P268,000 in 2015. This year, it estimated the group’s salary at P16.64 million and their bonus at P300,000.
In the same compensation filing, Alliance Select reported the following “aggregate compensation paid to all officers and directors as a group unnamed”: salary, P23.266 million and bonus, P2.109 million in 2014; P19.624 million and P393,000 in 2015; and (estimate only) salary, P18.59 million and bonus, P420,000 in 2016.
Alliance Select has been very generous to its top executives. In an earlier filing, it estimated at P13.71million the pays and perks of its five highest paid executives in 2015. In reporting the group’s actual compensation in an updated PSE posting, it said it paid them last year P20.017 million, thereby “overspending” by P6.307 million, which was equivalent to 46.003 percent of the earlier estimate.
As of Aug. 31, 2015, Alliance Select reported $27,112,886 as the amount of debt outstanding, which at P46.004 to a dollar would total P1,274,305,642. As of March 31, 2016, its “amount of debt outstanding” stood at P9,438,768,299. Translated, this means in less than one year, the company’s outstanding debt surged by P8,164,462,657.
Do these financials make Alliance Select a good stock? On Friday, it opened the session at P0.92, hit a high of P1.35, fell to a low of P0.92 and closed trading at P1.25. The number of shares traded totaled 142.493 million. Such volume may not be bad for a stock that had recorded a 30-day high of P1.35 and 30-day low of P0.80.
If the PSE’s market watchers were surprised by Alliance Select’s 46.739 percent surge, they should review the volume of trades against historical transactions and start asking who are trading. The question is, how Alliance Select ended up a subsidiary of Strongoak Inc. that has only P62,500 paid-up capital out of P1 million authorized capital.
Perhaps, this is the task of SEC Chairperson Herbosa.