Meralco stock trading suspended
By Elizabeth Sanchez-Lacson, Abigail L. Ho, Doris Dumlao
Philippine Daily Inquirer
First Posted 04:10:00 12/18/2008
Filed Under: Stock Activity, Markets & Exchanges, Company Information, Mergers - Acquisitions - Takeovers, Electricity Production & Distribution
The Philippine Stock Exchange (PSE) Wednesday suspended trading of shares of power distributor Manila Electric Co. (Meralco) indefinitely, as a legal debate between the company and state-owned minority stockholder Land Bank of the Philippines intensified.
In a new ruling issued Wednesday, the Department of Agrarian Reform’s Office of the Regional Adjudicator for Region 4 ordered Meralco to restore to Land Bank the ownership of 42 million shares it had issued to a person in connection with contested land under the government’s agrarian reform program.
Meralco corporate secretary Emmanuel Sison appealed to the PSE to lift the suspension on trading of Meralco shares, as “the issue involves only 42 million shares out of the 1.1 billion shares” outstanding.
“Many shareholders are not in any way involved in the issue but are nevertheless greatly affected,” he said.
Meralco also stood by its position that it was merely complying with a lawful order when it cancelled stock certificates held by Land Bank and issued new ones to one Josefina Lubrica.
The shares under protest are equivalent to about 3.8 percent of Meralco’s total issued stocks and are part of a 10-percent block that government financial institutions have agreed to sell jointly to Global 5000 Investment, a local investment fund led by business magnates Iñigo Zobel, Roberto Ongpin and Jose Campos Jr.
In the new order, the Department of Agrarian Reform’s Regional Adjudicator Marivic Casabar ordered Meralco to cancel the stock certificates issued to Lubrica and any of her transferees or assignees and restore the ownership of the shares to Land Bank and record them in Meralco’s stock and transfer book.
The adjudicator also ordered the PSE, Philippine Depository and Trust Corp., Securities Transfer Services Inc., Philippine Dealing System Holdings Corp. and related entities as well as any stockbroker, dealer or agent of the contested Meralco shares to stop trading or dealing those shares and undo contravening acts.
The suspension of the shares trading on Wednesday was aimed at shielding investors from risk. The PSE board sanctioned the suspension Tuesday night at an emergency meeting convened after Land Bank alleged that Meralco had illegally cancelled its stock certificates on the eve of the deal to sell jointly with other government financial institutions to Global 5000 Investment, which is believed to be allied with the beverage and food group San Miguel Corp., which is making aggressive thrusts to diversify its businesses.
Securities and Exchange Commission Chairperson Fe Barin said that the commission was “looking into the matter.”
Meralco’s Sison said the company’s action was pursuant to the demand to comply dated Nov. 3 issued by the Department of Agrarian Reform. The cancellation of the Land Bank shares and their transfer to Lubrica was completed on Nov. 28, even before Land Bank and two other government financial institutions agreed to sell their shares to Global 5000 Investment. [Read earlier story]
On Dec. 4, Meralco informed the Office of the Regional Adjudicator of the cancellation and eventual transfer of the shares, in compliance with the demand to comply that was issued to Meralco earlier.
As for the new order from the new DAR Region 4 adjudicator Casabar, Sison said he could not yet comment since Meralco “has not been officially furnished with a copy of the said order.” With editing by INQUIRER.net
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