|
WITH its
increasing ownership in San Miguel Corp. (SMC), which
has reached close to 20 percent, Kirin Brewery Co. Ltd.
of Japan may become a very strong force to reckon with
as a significant stockholder and ally of SMC chairman
Eduardo Cojuangco Jr.
More
important, Kirin, as an insider with three seats in
SMC’s 15-member board, may be in a strategic position to
buy out San Miguel from some of its subsidiaries. If
this happens, Kirin will transform its ownership in SMC
units that are up for sale, from indirect, as an SMC
stockholder, to direct.
The
biggest sale made so far by SMC was its 65-percent
controlling stake in Coca-Cola Bottlers Philippines Inc.
(CCBPI) for $590 million. The sale included Cosmos
Bottling Co., which it co-owned with Coca-Cola via
Philippine Bottlers Inc. Understandably, CCBPI and
Cosmos went to Coca-Cola South Asia Holdings, a unit of
the Atlanta-based Coca-Cola Group, and not to Kirin.
Cojuangco-Kirin’s secret deal
IT’S
about time the Securities and Exchange Commission (SEC)
reveal the secret deal the Japanese company signed over
five years ago with SMC chairman Eduardo Cojuangco Jr.
and the 43 corporate stockholders of San Miguel
associated with him.
Is there
anything in their deal that should worry market
investors? The answer or answers will remain a guessing
game among market players as the paper trail leads only
to SEC, which, as regulator, demands listed companies to
be transparent. The question now is: Who will police the
regulators for nondisclosure?
Only a
few SEC officials, including lawyer Justina F. Callangan,
the director of SEC’s corporation finance department,
would know the real score, having become privy to the
agreement as caretaker and keeper of a copy of the
secret deal. But they would not talk about it.
Kirin
first bought into San Miguel in December 2001 when it
subscribed and paid for 442.56 million common B shares,
equivalent to 14.95 percent of SMC’s outstanding capital
stock. As of June 29, 2007, the Japanese conglomerate
owns 628,640,175 common B shares, or 19.928 percent, a
stake which entitles it to three seats in the 15-member
board.
Legal
opinion
PERHAPS
the SEC should release its legal opinion, if it has
drafted any, on the request (made by this writer in
2002) for a copy of the Cojuangco-Kirin agreement in its
possession.
The
search for the shareholders’ agreement between Kirin and
Cojuangco began on November 9, 2004, when this writer
asked the SEC in a letter for all the disclosures
surrounding the sale of SMC shares to
Kirin.
In response, Callangan wrote that SMC
had filed the following disclosures:
1.
Definitive Proxy Statement (SEC Form 20) filed by SMC in
January 2002 for its Special Stockholders’ Meeting on
February 27, 2002. The particular disclosure was on the
then-proposed increase in authorized capital stock of
SMC from which Kirin subscribed to a total of 442.56
million common shares, equivalent to 14.95 percent of
outstanding capital stock of SMC;
2.
Initial
Statement of Beneficial Ownership of Securities (SEC
Form 23-A) filed by Kirin on March 14, 2002; and
3.
Proxy
Statement (SEC Form 20) filed by SMC on April 20, 2002
which indicates the list of beneficial stockholders of
SMC that already included Kirin’s security ownership.
All
these disclosures “are available to the public, she
said. “What has been held confidential is the
shareholders’ agreement which was executed between and
among Kirin and the other stockholders of SMC.”
Callangan, however, said “the issue of confidentiality
of the shareholders’ agreement is under study by the
Commission.” After five years and six months, the SEC
has yet to issues a legal opinion, which was supposed to
have been undertaken by lawyer Vernette Umali-Paco as
SEC general counsel.
Lawyers’
arguments
Just how
important the shareholders’ agreement was to the
contracting parties can be gleaned from the replies by
the lawyers.
“We are
in the process of confirming several factual matters
cited in the [SEC] letter and related documents,”
lawyers Wilma Valdemoro Cua and Benjamin Carale of
Romulo, Mabanta, Buenaventura, Sayoc & Delos Angeles law
firm argued for Kirin in a letter dated October 6, 2004.
“We will be raising substantial legal and factual issues
in reply to your letter.”
For his
part, as legal counsel for Cojuangco, former Solicitor
General Estelito Mendoza, a Cojuangco nominee to the
SMC board, told the SEC that “the matter is of vital
importance and will require study and consideration of
relevant law and jurisprudence.”
From
14.95 percent, Kirin now owns 628,640,175 SMC common B
shares, or 19.95 percent, making it the third-biggest
stockholder. CIIF Companies’ 753,848,312 shares,
consisting of 446,452,536 common A shares and
307,395,776 common B shares, are held by the government;
ECJ Companies, controlled by Cojuangco, owns
546,667,084, shares, or 17.35 percent, of which
473,332,727 are common A shares and 73,334,357 common B
shares.
SM
Investments Corp., the flagship company of SM group
controlled by the family of businessman Henry Sy Sr.,
holds 339,349,120 common A shares, or 10.77 percent.
San
Miguel Corp. Retirement Plan owns 320,448,872 common
shares, or 10.20 percent, including 56,681,813 common B
shares which it bought from ECJ Companies in May 2007.
It owned 19,669,350 common A shares as of March 31,
2007. It landed among the top stockholders after buying
195,702,625 common A shares from the Government Service
Insurance System early this year. |
