• Stockholders’ suit filed to force Alliance Select to ‘open the books’

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    Emeterio Sd. Perez

    Emeterio Sd. Perez

    ALLIANCE Select Foods International Inc. was then called Alliance Tuna International when it filed its audited financial statement for the year ended December 31, 2008. In a posting on the website of the Philippine Stock Exchange, the company told the public that the audited report contained its financial performance and “a subsidiary.”

    With only one unit, Alliance Tuna then was not a very big company, having a capital stock of $11.540 million. As of December 31, 2013, it had capital of $22.576 million.

    But as Alliance Tuna, the company experienced its best profitability. In 2008, its net income surged 40.455 percent to $3.208 million from $2.284 million in 2007. In 2006, its net profit amounted to $2.029 million.

    When Alliance Select reported its 2008-2010 financial performance, its report could have worried its stockholders, particularly the minority. In its financial filing, it said its net profit dropped 41.538 percent to $1.969 million in 2009 from $3.368 million in 2008, the fishing firm’s most profitable year.

    Alliance Select was no longer the tuna company that it used to be.

    In 2010, it told regulators that its net profit fell 17.877 percent to $1.617 million from $1.969 million in 2009. In 2011, it initially reported a net loss of $951,663 but a restatement of the company’s audit report even resulted in a bigger loss that topped the million-dollar mark at $1.053 million on revenues of $51.337 million.

    In 2012, Alliance Select slightly recovered when it registered consolidated net profit of only $767,429 despite revenues of $82.337 million. If the company’s public stockholders rejoiced on the company’s temporary rebound, they were in for a shocker. In 2013, Alliance Select lost $2.919 million despite revenues of $84.328 million.

    Incidentally, the heading of the audited financial report was “Alliance Select Foods International Inc. and subsidiaries.” As of December 31, 2013, Alliance Select had eight subsidiaries, which are all registered in other countries. Apparently, size does not ensure profitability.

    Again, size is never an assurance of a company’s strength and profitability.

    The numbers shown here are culled from regulatory filings that remain posted on the PSE website. They tell the story of a company that went on an acquisition spree and organized units in other countries such as Thailand, Indonesia, New Zealand and the United States.

    Is Alliance Select going global? If it is, then its expansion has not been paying off. Instead, its losses had probably frightened those who have been examining the company’s financial performance over the years.

    Besides shrinking profits, Alliance Select had to contend with paying more interest on its accumulated borrowings. As of December 31, 2012, it had $23.951 million and $5.176 million in outstanding short term and long term debt respectively.

    All this should worry the public investors, among them the foreigners, who, in the beginning, had faith in Alliance Select shares. The Singaporeans, for instance, had wanted to scrutinize the deals made by the Dee group, but their demand that they be allowed to go over the company’s books had been turned down by the company.

    As of January 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 Ltd., 177.261 million shares; Victory Fund Ltd., 138.474 million shares; Albert Hong, 39,071 million shares; and Bondeast Private Ltd., 13.023 million shares.

    At P2.19 on November 12, 2012, the Singaporeans’ holdings were worth P805.548 million. By December 13, 2013, when the stock dropped 57.534 percent to P0.93, they got poorer by P463.465 million when the value of their holdings dropped to only P342.083 million.

    In going to court, the Singaporean-owned corporate stockholders cited as respondents in their suit George Sycip, who joined Alliance Select as an independent director and chairman in 2009; and three other directors, namely, Jonathan Dee, president and chief executive officer; Alvin Dee, vice chairman and Ibarra Malonzo.

    esdperez@gmail.com

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