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NOT
again.
Washington Z. Sycip may have uttered this upon learning
that the Securities and Exchange Commission (SEC)
questioned his nomination for reelection as an
independent director of Benpres Holdings Corp., a
Lopez-controlled company.
Earlier,
Winston F. Garcia succeeded in forcing Washington Sycip
to withdraw his nomination to the 10-member board of the
Manila Electric Co. (Meralco).
The
Lopezes control the board and management of Meralco,
through the ownership of First Philippine Holdings
Corp., with 119.082 million shares, or 10.68 percent;
and First Philippine Union Fenosa Inc., with 253.093
million shares, or 22.705 percent.
Sometime
last year, the family bought out their foreign partners
in Union Fenosa and also acquired the shares held by the
Meralco Pension Fund Inc. The fund used to own 88.065
million shares, or 8.736 percent, which has dropped to
24.342 million shares, or 2.184 percent.
For the
second time in a month, Sycip faced another opposition
to his reelection to the board of Benpres, the listed
holding company of the Lopez-family. The other one,
Lopez Inc., is unlisted.
Garcia
is president, general manager and vice chairman of the
board of trustees of the Government Service Insurance
System. He directly owns 101 Meralco common voting
shares, but is using GSIS-owned 245.819 million shares,
or 22.05 percent, in the government’s apparent
maneuver—which the administration denies—to take over
the electricity firm by ousting the Lopez family-led
management.
Sycip,
apparently not wanting to be dragged into a
controversial stockholders’ war, decided to withdraw his
nomination as one of two independent directors of
Meralco’s board when Garcia opposed his nomination for
reelection because of his previous connection with SGV &
Co., which is Meralco’s independent auditor that still
carries his family name. The three letters stand for
Sycip, Gorres and Velayo.
It was
not Sycip’s fault if he had been in demand as
independent director after retiring in 1996 from SGV,
which he founded in 1946. He sits on the boards not only
of Meralco and Benpres but also of First Philippine
Holdings Corp., which are all controlled by the Lopez
family.
On
Monday Sycip was reelected independent director of First
Holding, a post to which he was first elected in 1997.
Separate
filings showed Sycip is in the boards of Belle Corp. and
Highlands Prime Inc., which belong to SM Group. He is
chairman of the boards of MacroAsia Corp. and Lufthansa
Technik Philippines Inc., and a director of Philippine
Airlines and Philippine National Bank, all controlled by
business magnate Lucio Tan.
It is
only in Benpres’s board that the SEC questioned Sycip’s
nomination for another term. In a letter dated April 29,
2008, Justina F. Callangan, director of SEC’s
corporation finance department, cited Sycip’s attendance
of only five of 11 meetings of the board as “a ground
for temporary disqualification” based on a provision of
Benpres’s own Manual of Corporate Governance.
Under
that manual, a nominee is disqualified for reelection
for “absences or nonparticipation for unjustifiable
reason for more than 50 percent of all meetings, both
regular and special, of the board of directors during
his incumbency.”
But
Benpres stood by Sycip. In response to Callangan’s
letter, Enrique Quiason, the company’s corporate
secretary, said the board “shall have the final decision
to determine the qualification and disqualification of a
director.”
Quiason
said absences per se are not ground for
disqualification—only “absences without any justifiable
reason.” He added that this provision “should be read in
conjunction with other provisions of the manual, which
states the other qualifications and duties of a
director.”
As a
member of Benpres’s audit committee, Quiason described
Sycip as an active director. “He actually meets with
management and members of the board to discuss business
matters,” he said.
Sycip
was managing partner of SGV from 1947 until 1972.
Quiason said with his decades of experience, “it is not
difficult to see why he [Sycip] sits as member of the
company’s audit committee where he has actively offered
his time, knowledge, expertise and service….”
Quiason
added that Sycip “was present in all meetings of the
audit committee…which has the crucial duty to check all
financial reports against its compliance with both
internal management handbook and pertinent accounting
standards….”
He added
that it may be more important to note that the provision
cited by Callangan is “simply a ground for
disqualification and does not result in an outright
disqualification of a director, or a nominee….” |
