ARE the proponents of the appointment of independent directors to the board of listed companies aware of how an independent director of Alliance Select Foods International Inc. defines his function?
George Sycip refers to himself “as an independent director and chairman of the board with responsibility of looking out for the best interest of the company as a whole and not for any particular shareholder factions.”
Wow! What happens to the public that as an independent director, Sycip is supposed to protect? Finally, here is a proof against the continued appointment of an independent director. It is intriguing that as chairman, Sycip admitted his loyalty only to Alliance Select.
If the company’s public stockholders would analyze Sycip’s statement, some, if not all, would probably agree with Due Diligencer that this independent director could be beholden to the majority stockholders. What could the public expect from the board of Alliance Select headed by chairman Sycip should they ask for the company to open the books to them? Dilly-dallying, perhaps, would be the best strategy against the public’s request. How much red tape in opening the books for stockholders’ scrutiny is subject to board approval?
Oh, yes, board approval could be the best alibi to prevent the unnecessary exposure of whatever private transactions, if any, of the majority-led management.
In a filing in connection with an inquiry, Sycip and company told the Philippine Stock Exchange that opening the books would be “premature because the board of directors is still deliberating on the Notice of Inspection.”
Premature? When has a company set a timetable for transparency? What the public knows is that full disclosure should be observed at all times. In the case of Alliance Select, the PSE might want to go over all filings of the company to see if it has been religiously complying with the rules on posting. It only had to compare the dates of posting and the date of the request for transparency.
After all, numbers such as dates don’t lie. They tell investors when they are losing and when they are winning on their market investments. Take the single minority stockholders of Alliance Select. After the Dee family, who owns thru Mingjing Holdings Inc. 112.169 million shares, or 10.49 percent, directly, and 427.904 million shares, or 40.02 percent indirectly, the Singaporeans are the biggest significant minority.
As of Jan. 15, the Singaporeans owned—and still hold today—367.831 million Alliance Select shares, or 34.395 percent. These are held by Harvest All Investment Limited, 177.261 million shares; Victory Fund Limited, 138.474 million shares; Albert Hong, 39,071 million shares; and Bondeast Private Limited, 13.023 million shares.
At P2.19 on Nov. 12, 2012, the Singaporeans’ holdings were worth P805.548 million.
By Dec. 13, 2013, when the stock dropped 57.534 percent to P0.93, they got poorer by P463.465 million, leaving them owning only P342.083 million worth of Alliance Select shares.
Why the huge loss? Of course, the Dees are also losing. But remember, they are the majority responsible for charting the profitability of Alliance Select and not its fall that could lead to bankruptcy.
Nobody would know the answer why Alliance Select’s stock price had fallen below par in a little over one year. But the public could ask for the opening of the company’s books to find all details surrounding the takeover deals and acquisitions made by the majority stockholders in the name of diversification.