IF you go by the filings posted by the Philippine National Construction Corp. on the website of the Philippine Stock Exchange, you may find a danger sign that the Aquino administration could be a continuation of the six-year regime of the late President Corazon Cojuangco Aquino, who happens to be the mother of the sitting president.
In a previous piece, Due Diligencer suggested that if the mother used the Presidential Commission on Good Government against her political enemies and their business connections, her son wields more power than her. President BS Aquino 3rd has at his disposal the Anti-Money Laundering Council and the Bureau of Internal Revenue, two government agencies that he had successfully tapped in illegally ousting Chief Justice Renato Corona.
Recent events show that Kim Henares, Aquino’s chief tax collector, is a willing tool versus the political enemies of the administration. She imposes a selective policy of going after tax evaders, finding it more convenient to go after the small fish rather than collect what has long been due from big tax payers. Due Diligencer has already named one- Golden Donuts Inc.—in her list of untouchables. GDI owed—and still owes—the government P1.51 billion in deficiency taxes payable for the year 2007. The amount could reach more than P2 billion today if Henares and the chief temporary occupant of Malacañang would update the computations to include penalties and surcharges as the BIR has been wont to do against non-influential businesses and individual tax payers.
Back to PNCC. Businessman Rodolfo Cuenca was the controlling stockholder of Construction and Development Corporation of the Philippines, PNCC’s former name. But being a government-controlled corporation today, PNCC will never become private again with Cuenca as chairman of the board. Privatization would be a very bad word if applied to the company today because Aquino, formerly only a presidential son and unfortunately for the public is now the president has turned PNCC into a government-owned—not only controlled—corporation, ignoring the presence of minority but private individual stockholders
As a matter of fact, Aquino has placed PNCC under his command through a presidential decree making him just like what the late President Ferdinand Marcos used to although he could never be like him. As president of this country, he took advantage of the remaining two and four months—more or less—of his six-year term by taking over PNCC. In issuing Executive Order 141, Aquino even invoked the name of “our Lord” when he signed it on October 14, 2013, to effect his full control and takeover of a public company listed on the Philippine Stock Exchange.
Being under Aquino, PNCC is now a “wholly owned subsidiary” of the Office of the President that has the power to appoint and dismiss the members of the board and nominate—appoint or assign would be the more appropriate word—the company’s executive officers. As presidential appointees, the members of the board can only be obedient to their president. Lawyer Elpidio Jamora has nothing to worry about because obedience will allow him to stay in his post as chairman of the board until Aquino’s term ends on June 30, 2016. All he has to do is obey his president. Period.
By the number. As of May 31, 2013, PNCC, according to its own filing, has outstanding capital of 199.94 million shares divided into 174.44 million common and 25.50 million preferred. Of the total, the government controls 152.26 million shares consisting of 126.76 million common and 25.50 million preferred shares, or 76.14 percent. The computations should give the private stockholders 47.68 million shares, or 23.85 percent. (As recomputed: Dividing 152.26 million by 76.14 percent equals 199.974 million outstanding shares, exceeding reported outstanding shares by 34,000 shares.) Minus the government-held shares, the public should be credited with owning 47.68 million shares, or 23.85 percent.
If you go by the above computations, the public investors should have elected at least two representatives in PNC’s11-man board with their holdings of 47.68 million shares equivalent to 23.85 percent. But as has been the government practice, the public owners have not gotten a change to nominate anyone of them simply because of their scattered ownership, meaning there are too many of them to agree on common nominees.
If the public did not have the chance to get into the board, the less they have the opportunity to know anything going on inside the PNCC boardroom, which, with Aquino in command, would probably be held in Malacanang. Nobody will ever know what PNCC’s dealings are particularly in joint ventures with private entities that are not public or not listed on the PSE board.
The specifics. Did Aquino suddenly take interest in PNCC by placing it under his office because of its forthcoming joint venture with Metro Pacific group of First Pacific Co.? With the president on top of everything going on within PNCC through his appointees to the board, PNCC signed a joint venture agreement with Metro Pacific Tollways Corp., which was described in a PSE posting as “subsidiary of Metro Pacific Investments Corp.,” a Philippine unit of the Indonesian-owned First Pacific group of Hong Kong. The agreement covers the construction of “an 8-kilometer road that will connect to the Harbor Link of NLEX and South Luzon Expressway” with “total project cost of P18 billion.” Due Diligencer failed to find the numbers as to PNCC’s financial contribution to the implementation of the ambitious highway deal.