Time to get rid of independent directors

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Emeterio Sd. Perez

Emeterio Sd. Perez

INSIDERS’ TRADES. Edgardo Maclang Cruz Jr. of JY Campos Center, Bonifacio Global City is a member of the board of Del Monte Pacific Ltd. As of December 31, 2013, he owned 1.963 million Del Monte shares. He used to hold 490,000 but bought 1.473 million shares in 11 transactions starting on December 16 until December 23.

At highest acquisition price of P22.80 he must have spent P33.582 million in buying his additional holdings in the company. At the same price, his total holdings are worth P44.754 million.

Black River Capital Partners Food Holdings (Singapore) Pte. Ltd. increased to 165.642 million common shares, or 30.92 percent, from 15.058 million common shares its holdings in AgriNurture Inc. The additional 150.58 million common shares resulted from the conversion of the Singaporean company’s P335-million loan to AgriNurture. The conversion translates to P2.22 a share.

On December 20, 2013, Lopez Inc. paid P1.5 billion for its additional subscription in June last year to 34.7 million common shares in ABS-CBN Corp. The acquisition increased the number of ABS-CBN outstanding common shares to 857.36 million. ABS-CBN also had 14.76 million treasury shares.


Pays and perks. In regulatory filing dated March 2, 2013, ABS-CBN estimated at P1.147 billion the 2013 compensation of its key management executives, led by Ma. Rosario Santos-Concio, chief executive officer (CEO).

But ABS-CBN could be paying the group more this year because from January to September of 2013, the Lopez-controlled broadcasting group reported having paid Concio and company P1.144 billion, or 0.26 percent close to the company’s annual estimate. Computed, the nine-month pays and perks last year of ABS-CBN management soared 55.68 percent, or P409.22 million more, from P734.98 million in the same period in 2012.

The comparative quarterly filings suggested that ABS-CBN’s executives from CEO down to managers, and probably including directors, would have gotten more than the estimated P1.15 billion by December 31, 2013.

Ownership update. Bankard Inc. is formerly Philippine Commercial Credit Card Inc., a subsidiary of Philippine Commercial International Bank. When BDO Unibank Inc. acquired PCIBank, it did not want Bankard, which it sold to the Yuchengco-controlled Rizal Commercial Banking Corp. (RCBC).

On December 10, 2013, the Yuchengcos renamed Bankard Bright Kindle Resources and Investments Inc., a new corporate identity that required amendment to Bankard’s charter.

But then, RYM Business Management Corp., which is a significant stockholder of Benguet Corp., acquired Bankard by buying out the Yuchengcos, who owned the credit card company through RCBC and RCBC Capital Corp. The filing said the buyer ended up owning 1.37 million Bankard shares, or 89.9 percent, from the Yuchengco group, who had not filed for the change of the company’s name to Bright Kindle Resources.

The sale enabled Yuchengcos to get rid of Bankard while grossing P1.095 billion from RYM, which the Romualdezes use as their takeover corporate vehicle.

Paging SEC. Chairman Teresita Herbosa and the four other members of the five-person regulatory body of the Securities and Exchange Commission should review the SEC’s disclosure policy by giving priority to the early filing of the executive compensation of the members of the management team of listed companies.

Instead of waiting for the audited financial reports, SEC officials should require the earlier submission of the annual compensation not later than January 31 of the following a fiscal year. The public investors would be more interested in knowing if these executives are either underpaid or overpaid, or if the price of a particular stock keeps falling because of them or despite them.

Some, if not all, listed companies may protest this suggestion. But should the SEC simply listen and avoid confrontation with the majority stockholders of what are supposed to be public companies but in reality are not? It is about time SEC officials regain or live up to their billing as the market’s regulatory authority.

The public investors no doubt would be interested to know how much listed companies spend a year in maintaining in their payroll the “no-interest” directors, more publicly known as independent directors, who, in most cases hold only a nominal share to qualify them to sit in the board.

Who knows the public investors may be beginning to hate the appointment of independent directors, who get fat fees they not deserve at all.

Why not abolish the nomination of such independent directors?

esdpere@gmail.com

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