BY JENNEE GRACE U. RUBRICO, Sub-Editor
Ownership limit breaches tagged
SIX LISTED COMPANIES have exceeded constitutional caps on foreign ownership while three others are at the limit, the Philippine Stock Exchange (PSE) yesterday said, even as it left a decision on whether sanctions were merited to corporate regulators.
In a circular for brokers, the PSE said it had been informed of the ownership limit breach by Philippine Depository & Trust Corp. after transfer agents rejected requests to reclassify some
of these firms’ shares to non-Filipino from Filipino.
The companies were identified as Megaworld Properties & Holdings, Inc., Philippine Racing Club, Mabuhay Holdings Corp., Edsa Properties Holdings, Inc., Ayala Land, Inc., and Asian Terminals, Inc.
The firms, which are in property development, power, and transportation, are all required to
limit foreign ownership to 40%.
“According to the transfer agents, these issues have already breached their foreign ownership limits,” the Philippine Dealing System group said in a letter to the bourse.
Three others, meanwhile – Ayala Corp., ATR Kim Eng Financial Corp., and Mabuhay Vinyl Corp. – were said to have hit the foreign ownership ceiling.
Company representatives reached by BusinessWorld denied that the constitutional caps had been exceeded, with the Securities and Exchange Commission said it would consider the matter.
The PDS said Megaworld had been in breach since February 2007, while Philippine Racing Club and Mabuhay Holdings went past the limits in 2005. Edsa Properties, and Asian Terminals, meanwhile, have allegedly been violating foreign ownership restrictions since June 30, 2007, while ALI has been above the limit since July 10.
In a telephone interview, PSE President Francis Ed. Lim said the companies would not be penalized for the alleged breach in the foreign ownership limits.
“This was discovered by accident but it has already been sorted out,” he said.
Another PSE official, meanwhile, said that the PSE could not penalize the firms because can only monitor breaches in constitutional limits.
“The PSE has nothing to do with it (penalizing companies), he said, but added that a breach in foreign ownership limits was a “constitutionality problem”.
Companies, he said, may be penalized if a party files a complaint or if the Securities and Exchange Commission decides to look into the matter.
SEC Commissioner Jesus Martinez, for his part, said that he had yet to see the PSE circular. But he said that generally, companies that breach the foreign ownership limits could be prosecuted and subjected to monetary penalties.
“If there is a constitutional violation ... prosecution will be considered in any light,” Mr. Martinez, who oversees the market regulation division, said.
He added that the gravity of the penalty would depend on how long the firms have been going past the constitutional limits. He said penalizing firms would be the last resort.
“There could be a show cause order and companies will be asked to explain,” he said.
The firms, however, denied having violated the constitutional provisions on foreign ownership.
“We already told them (the PSE) that [the] bulletin is wrong. In the system of the transfer agents, when ever a sale breaches, it’s not allowed in the system. The certification from our transfer agent, RCBC (Rizal Commercial Banking Corp.) said that as of June 30, we were at 39.8% ... we didn’t even reach 40%,” Federico Noel, Edsa Properties corporate secretary, said, adding that the company already “called the attention of PSE.”
He also said monitoring foreign ownership limits was the lookout of listed firms’ transfer agents, and that “the company will not know because it’s traded.”
ATI president Eusebio H.Tanco, meanwhile, said there wasn’t really a breach because the stakes bought by foreign investors over the cap are not registered. He also said that while stock transfer agents monitor the shareholdings of foreign investors in ATI, “this is not seamless.”
“Sometimes, when foreigners buy, they exceed. But we are monitoring this and we are addressing the problem,” he said.
Megaworld, for its part, said changes in its ownership structure have kept foreign ownership in the firm well within limits.
“The Securities and Exchange Commission has acknowledged the filing of the Certificate of Adoption of the Enabling Resolution passed by the Board of Directors of Megaworld on July 18, 2007, authorizing the issuance to Alliance Global Group, Inc. of 6,000,000,000 voting, cumulative, non-participating, non-convertible and non-redeemable Series “A” Preferred Shares worth P60 million,” Megaworld said in a statement.
“After issuance of the Shares to Alliance Global Group, Inc., Megaworld now has 26,641,646,901 shares consisting of 20,641,646,901 common shares with par value of P1.00 per share and 6,000,000,000 preferred shares with par value of one centavo per share. Out of the 26,641,646,901 outstanding shares, 18,397,010,967 shares representing 69.05% are owned by Filipino citizens while 8,244,635,934 shares representing 30.95% are owned by foreign nationals,” it said.
Ayala Land Inc. officials declined to comment, while Mabuhay Holdings and PRC executives could not be reached for comment.
Minority shareholders of PRC, meanwhile, released a statement yesterday asking the SEC to look into the PSE report.
Alfonso Javier D. Reyes, Ayala Corp. secretary, confirmed that the Ayala family’s holding company had reached the 40% foreign ownership limit.
“There’s no breach but it’s true that we are at the foreign ownership limit. What happens is if there is more foreign demand for shares, they’re queued up,” he said.
He added that Ayala Corp. would be getting shareholders approval for a stock rights offering of preferred shares.
The offer, which would allow shareholders to buy one share for every existing one they hold, will be presented to stockholders on August 28 and would likely be started by October.
The PSE recently came out with a memorandum that requires listed firms with unclassified shares and foreign ownership limits to update their securities information on a daily basis.
Starting July 2, listed firms have been required to give daily reports through the PSE’s online disclosure system.
No comments:
Post a Comment