FATHER MUST BE PROUD. The merged bank's chairman Tessie Sy-Coson, with Sy patriarch Henry Sy Sr., is shown above during last December's special stockholders' meeting approving the "merger of equals" of Banco de Oro and Equitable PCI Bank. Flanking them are Rene Buenaventura (left) of the pre-merger EPCIB and Nestor Tan of BDO. --Roy Domingo

THE merger of Equitable PCI Bank with Banco de Oro Universal Bank, which is controlled by the SM Group of Companies of businessman Henry Sy Sr. and his family, may have ended the fight between the Philippine government and Trans Middle East (Philippines) Equities Inc. on who should sit in the former’s board by virtue of the sequestered EPCIB shares.

Trans Middle East has been entitled to a seat in EPCIB board as the record holder of the shares, the ownership of which is still under litigation. The Lopez family, who controls ABS-CBN Broadcasting Corp. and Benpres Holdings Corp., which are both listed on the Philippine Stock Exchange, have a pending suit claiming ownership of the EPCIB shares in the name of Trans Middle East.

However, the merger of EPCIB with Banco de Oro, with the latter as the surviving entity, may have ended the claim of the Romualdez family to a seat in the board of the much-bigger Banco de Oro-EPCI Inc.

In its filings, EPCIB said Ferdinand Martin G. Romualdez has been elected to the EPCIB board as nominee of Trans Middle East, which his family owns.

Trans Middle East holds 51,827,640 EPCIB shares, equivalent to 7.129 percent of the lender’s 727,003,345 outstanding shares.

The EPCIB shares held by Trans Middle East were more than enough to qualify Romualdez in the bank’s board. Based on the number of EPCIB’s outstanding shares, a stockholder owning at least 48,466,889.66 EPCIB shares was entitled to a seat in the bank’s policy-making body.

To remain a director of BDO-EPCI 11-man board, however, Romualdez would need at least 206,420,824.727 shares, or 9.09 percent, of the 2,270,692,069 outstanding shares after the merger of the two banks. Trans Middle East’s EPCIB shares would be equivalent to 93,289,752, or 4.108 percent of BDO-ECPI’s outstanding shares.

In a disclosure on the merger, BDO said the new outstanding shares will consist of 1,308,606,021 shares resulting from the swap of 727,003,345 EPCIB outstanding shares at a ratio of 1.8 BDO share for every one EPCIB share, and the existing 962,023,048 BDO outstanding shares.

Win some, lose some

IN a filing in connection with its special stockholders’ meeting on December 27, 2006, EPCIB told the Philippine Stock Exchange and the Securities and Exchange Commission that Romualdez has been an EPCIB director since July 2001. Despite having only one seat, he was elected vice chairman in April 2001 and chairman from July 2005 to February 21, 2006.

Last year, he lost the chairmanship to Corazon de la Paz, president and chief executive officer of the Social Security System (SSS). He also lost the bank’s vice chairmanship when he failed to get a seat in EPCIB board during the bank’s annual stockholders’ meeting in May 2006.

De la Paz is one of three SSS nominees in EPCIB board. The pension fund used to own 187,848,283 EPCIB shares, or 25.838 percent of EPCIB’s outstanding shares. Of these, SSS sold to the SM Group 159,742,924 shares, or 21.9278 percent, at P92 a share.

The SM Group last year made a tender offer for the remaining EPCIB shares it did not own. It ended up owning over 87 percent of the bank after the offer.

When Romualdez lost his seat in the EPCIB board, he went to the Supreme Court and obtained a favorable ruling reinstating him as director and vice chairman.

Romualdez was director of the former Philippine Commercial International Bank from May 1992 to January 1997, and got reelected on April 30, 1998. He remained in the board until PCIB’s merger with Equitable Banking Corp. on September 2, 1999.

In its corporate files, EPCIB classifies Trans Middle East as only a record stockholder, meaning it is the one listed in the roster of stockholders.

It said in a filing on its special stockholders’ meeting in December 2006 that it “is not aware who is/are the direct or indirect beneficial ow-ner/s thereof,” referring to the identity or identities of the true owners of the EPCIB shares held by Trans Middle East.

The SEC requires a listed company only to list in its annual and quarterly filings the names of its record stockholders.

A record stockholder, based on the SEC’s definition, is not necessarily the real owner or beneficial owner. He may be a nominee or a lawyer designated as such by the beneficial owner.

EPCIB apparently issued the clarification in view of the pending suit filed by the Lopez family to get back the EPCI shares held by Trans Middle East. The Lopezes claim that they are the beneficial stockholders of Philippine Commercial International Bank during the martial-law regime of the late Ferdinand E. Marcos.

No seat for Romualdez in BDO-Equitable PCI 11-man board

THE merger of Equitable PCI Bank with Banco de Oro Universal Bank, which is controlled by the SM Group of Companies of businessman Henry Sy Sr. and his family, may have ended the fight between the Philippine government and Trans Middle East (Philippines) Equities Inc. on who should sit in the former’s board by virtue of the sequestered EPCIB shares.

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