Small fried
Minority shareholders of distressed retail chain Uniwide are trying desperately to recover part of their hard-earned investments.
Recently, some 500 stockholders of Uniwide filed a case in court, seeking millions of pesos worth of damages from Uniwide and its partner in the project called Coastal Mall on Roxas Boulevard in Las Piñas.
That “partner” happened to be the land owner of the mall site, the one called MBDC, or the Manila Bay Development Corp., supposedly controlled by Jacinto Ng Sr., who in turn also owns National Biscuit Co., or Nabisco.
Anyway, as one of the measures to recover at least part of their investments, the minority stockholders also asked the court to order MBDC to renew the lease for Coastal Mall, which they said was the only way for Uniwide to continue operations.
Represented by a certain Brenelie Rualo, the minority stockholders were among the 15,000 or so investors who bought Uniwide shares back in 1996, when Uniwide tapped domestic and international capital markets for its IPO worth P4 billion.
At that time, Uniwide was reputed to be the biggest retail business in the country, operating more than 50 retail outlets in Metro Manila, with roughly 3,000 employees, enjoying a yearly cash flow of about P20 billion.
The founder of the Uniwide group was Jimmy Gow, who started the business with the first Uniwide textile bargain store in Binondo, parlaying the small business into other lines such as warehouse clubs and real estate ventures.
But in 1997, the Asian financial crisis struck, weakening the finances of the entire Uniwide group that borrowed heavily, partly to construct that very same mall in the reclaimed area in Las Piñas.
The Gow family ran to the SEC for help. The SEC put Uniwide under receivership, thus keeping its assets and business intact, aiming to help the group eventually repay its debts.
After more than 14 years under SEC rehab, however, the commission en banc last May ordered the dissolution of Uniwide. The Gow family of course objected to the SEC move, noting that the SEC-appointed receiver found the rehabilitation “viable.”
The minority stockholders also filed a derivative suit for damages amounting to some P100 million in the Parañaque court, on top of moral damages.
In effect, they argued that small stockholders were fried by the lopsided deal between Uniwide and MBDC in the Coastal Mall project, claiming it was a flawed contract that MBDC was able to force upon Uniwide with the help of key executives of Uniwide.
The small stockholders said lot owner MBDC leased to Uniwide some 20 hectares in the reclaimed area for 20 years, as the site for Coastal Mall that would be designed to be the biggest shopping mall in the country at that time.
All of a sudden, MBDC supposedly reduced the area leased to 10 hectares, apparently because the government’s road project called Macapagal Boulevard ate into the property of MBDC intended for the mall.
They claimed that MBDC still pursued the contract with Uniwide for the lease of the original 20 hectares without disclosing to Uniwide the upcoming road project of the government.
The group of small stockholders alleged a “conspiracy” between MBDC and two executives of Uniwide.
The small stockholders claimed that the two Uniwide executives, who were in control of the group’s funds, authorized the payment of about P380 million in supposed rentals to MBDC for the 10-hectare lease.
Worse, according to the small fries, the two executives even authorized payments of full rentals to MBDC, even while Uniwide was already under SEC receivership.
Now, it seemed that MBDC was even poised to take control of the Coastal Mall when it filed a P700-million “eviction” case against Uniwide before the Metropolitan Trial Court (MTC) in Parañaque.
Uniwide then ran to the Regional Trial Cout in Parañaque, asking that the court release Uniwide from the “onerous terms” of its contract with MBDC.
And the court ruled that MBDC indeed was “well-paid of the rentals albeit without doing good its part of the bargain.” In short, Uniwide won the case against MBDC.
