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Make listed companies also public


Jose Arnulfo A. Veloso is a member of the 15-person board of Philippine National Bank (PNB). At the same time, he is the bank’s president and chief executive officer. A public ownership report (POR) as of June 30, 2019 listed him as indirect holder of 159,101 PNB common shares.

On Aug. 5, 2019, Veloso bought 1,000 PNB common shares at P48.80 each, 1,000 PNB common shares at P48.75 each and 1,000 PNB common shares at P48.70 each. He followed his acquisition the following day by acquiring 1,000 PNB common shares at P47.50 each, 1,000 PNB common shares at P47.25 each, 1,000 PNB common shares at P47 each, and 200 PNB common shares at P47.45 each.

After buying 6,200 PNB common shares, Veloso reported his indirect ownership of 378,595 PNB common shares, which, he said, are all lodged with PNB Securities Inc. He said in the same filing that he did not directly own any of the bank’s common shares.

On July 22, 2019, Veloso bought 185,894 common shares at P43.38 per share by availing himself of the bank’s stock rights offering of 276,625,172 PNB common shares. He also bought on the same day 4,000 PNB common shares at P49.60 each and 2,000 PNB common shares at P49.50 each.

In a filing, PNB said it has allocated 276,625,172 common shares for its stock rights offering to raise P12 billion. At 43.38 each, the bank would have raised P11,999,999,961.36.

On Aug. 6, 2019, PNB common shares opened trading at P48.65, which was also the session’s high, dropped to a low of P46.90 and closed at P47.55. The stock hit a 30-day high of P57.35 and fell to a month’s low of P46.90.

Public stockholders

DFNN Inc. had 75 stockholders, who owned as of date of filing, 324,620,008 common shares, according to the company’s general information sheet (GIS). Their shareholdings represent 64.924 percent of authorized capital stock of 500 million shares divided into 400 million common and 100 million preferred shares. Both classes of shares carry par value of P1 each.

Of DFNN’s outstanding capital stock, 61 Filipinos owned 232,279,409 common shares, or 71.55 percent while 14 foreigners held 92,340,599 common shares, or 28.45 percent, according to the disclosure.

PCD Nominee Corp. topped the DIS list with two blocks of common shares. It held 206,982,820 DFNN common shares, or 63.76 percent, for Filipinos, and 81,927,293 common shares, or 25.24 percent, for foreigners. At No. 3 and 4 were Jean Henri D. Lhuiller and Ramon C. Garcia Jr., who held 7,347,319 DFNN common shares, or 2.26 percent, and 4,888,666 DFNN common shares, or 1.51 percent, respectively.

A public ownership report (POR) listed DFNN’s public stockholders as owners of 204,434,640 common shares, or 62.98 percent of 324,620,008 outstanding common shares.

The same POR showed Diversified Securities Inc. as direct holder of 200,000 DFNN common shares, or 0.0616 percent and indirect holder of 5,564,844 DFNN common shares, or 1.7143 percent.

The other two principal stockholders were OCU Group Inc. with direct ownership of 2.8 million DFNN common shares, or 0.8625 percent, and Excel Century Investment Ltd. with indirect ownership of 74,877,694 DFNN common shares, or 23.0663 percent, and 83,442,538 DFNN common shares, or 25.7047 percent.

DFNN will hold on Aug. 30, 2019 its annual stockholders’ meeting at 9 a.m. at Orchard A. 5th flr., Ascott Bonifacio Global City, 5th Ave. Cor. 28th St., Taguig, Metro Manila.

DFNN opened trading at its high of P6.46, dropped to a low of P5.95 and closed the session at P6.27. The stock hit a 30-day high of P6.70 and a month’s low of P5.80.

Due Diligencer’s take

The Securities and Exchange Commission (SEC) and the Philippine Stock Exchange should define which among listed companies are also public.

For instance, DFNN’s public stockholders were reported to own 62.98 percent of outstanding. The publics’ ownership may not be possible at all if only the regulatory authorities would review the memberships of the boards of ALL listed companies.

Based on its POR, the holdings of public stockholders totaling 204,434,640 DFNN common shares topped the three principal stockholders’ combined ownership of 120,185,368 common shares, or 37.0234 percent.

An SEC definition of company insiders, who are mostly the owners, and the public investors should not be confusing. As Due Diligencer has been writing in this space, business owners “own” the board because they even appoint their own independent directors (IDs).

In the first place, if the public investors do own the number of common shares attributed to them by listed but not necessarily public companies, they would be in control of the board.

If a board is composed of nine or 15 directors including IDs, how come none of them came from among the public investors, who, in the first place, are responsible in making listed companies’ common shares publicly traded.

Shouldn’t the SEC be the first to require listed companies to accept the nominees of the public investors as directors? Just asking.


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