- Category: Companies
27 Aug 2012
Even the public, whom market observers would refer to as investors outside the majority and controlling stockholders, may wonder who among them own most of the 74.06 percent of the outstanding common shares of Security Bank.The numbers may even become more puzzling to them when they look at the stockholders’ list in another PSE posting which shows a much different ownership profile with businessman Frederick Y. Dy, the single biggest stockholder.
The other stockholders, of course, are unknown because their Security Bank shares are held for them by PCD Nominee Corp. as record stockholder holding 161,243,447 shares, or 32.10 percent, for Filipinos, and 141,691,018 shares, for foreigners. Asiasec Equities Inc., as a stockbroker, is record stockholder of 59,656,844 shares owned by its various clients. In a footnote to the filing, the bank said Dy, along with other bank insiders, own a total of 91,597,843 shares, or 18 percent of outstanding.
This ownership structure that makes the public the majority owners is not a monopoly of Security Bank. There are a few other listed companies that are shown to belong to the public even if the public ownership may not translate to membership in its board. What may be more important is that listed companies are able to comply with the ownership reportorial requirement of the exchange no matter how their disclosures may contain something that the public may not be able to appreciate.
The question is how the PSE management has been taking all the numbers that may be misleading. Certainly, there is a way to evade responsibility for any potential misrepresentation contained in a disclosure, which Roel A. Refran, chief operating officer of the PSE, did when he wrote that the information in the ownership report “are based on the submission of listed companies.”
“As such,” he cautioned the public, “the PSE makes no representation on the accuracy, validity, correctness and completeness of the information contained in the attached document.” “Attached document” as used in the filing, refers to eight pages of “float level” report of listed companies. His warning, in effect, becomes “caveat emptor” (buyers beware) for the investors at large. If this is so, then is it “caveat emptor” of what, or of whom?
If a number of listed companies have not met, or failed to meet, the 10-percent minimum public ownership rule, then it could be said that more of them have been over complying with this regulatory requirement. If the public own only 1.51 percent of Allied Banking Corp., then they also should have been told that it could bea percentage of the bank’s listed 50,000 preferred shares. (Yesterday Allied Bank reported zero float level.) The same may be true of some listed companies that claim to be public when they are not, which is for the PSE to determine by defining what being public should be and not simply listed pretending to be public.
As a matter of fact, somebody at PSE may want to explain the difference between “free float” and “public float” when used to refer to public ownership. To make the minimum public ownership easily understandable, the Securities and Exchange Commission should intervene in defining public ownership of shares of stock of public companies. Are PCD-held shares considered publicly owned even if the beneficial stockholders are company insiders? In short, should the holdings of company insiders including members of the board be included in computing the public ownership in listed companies?
Less Security Bank gets the impression that By the Rule is picking on it, here are some of the listed companies with so big “float level:” such as PSE having a public float of 89.62 percent; First Abacus Financial Corp., 81.06 percent; Energy Development Corp., 50.68 percent; Manila Water Co., 65.59 percent; and China Banking Corp., 57.97 percent.
As they appear in the reports, these “float levels” would mean theindividual investors outside the families that control them are their majority stockholders when they are not. One only has to look at the corporate stockholders of these entities to arrive at the correct interpretation of “float level,” which may have been interpreted as referring to public ownership when they don’t.
With all this confusion, it may be time for the SEC to promulgate a policy requiring public companies to disclose the effective ownership— meaning the beneficial ownership—of the families and company insiders and of the public investors. In this way, you and I would know who are principals or actual owners and who act as their nominees.