Here’s another case in the growing list of companies being fought over by their shareholders.
The “majority group” of shareholders of Nationwide Development Corp. (Nadecor) is questioning the validity and legitimacy of the annual general meeting and election of a new board of what it describes as the “Calalang minority faction,” claiming the exercise was held “outside the bounds of pertinent laws.”
At the same time, lawyer Deogracias Contreras laughed off claims by the Conrado Calalang-led faction of Nadecor officers that the US-based St. Augustine Gold and Copper Ltd. (SAGCL) and Queensberry Mining and Development Corp. are the “strongest allies” of the Calalang group.
“The truth of the matter is SAGCL and Queensberry are the weakest link in the Nadecor chain of investors, hence these companies have been officially delisted as partners of Nadecor for failure to comply with their contractual obligations, specifically noncompliance with their financial commitments,” Contreras stressed in a statement sent to Biz Buzz.
According to him, Nadecor’s deal with SAGCL was rescinded in March 2012 for “various violations” of their contract. Contreras said out of $97 million in total financial commitments, SAGCL delivered only $4 million.
Other alleged violations of SAGCL included the “abandonment of the project and unauthorized pullout of workers and equipment from the project site, noncompletion of the detailed work program and schedule for completion of the declaration of mining project feasibility study and the bankable feasibility study.” Queensberry, meanwhile, allegedly failed to comply with its stock subscription agreement.
Contreras said Queensberry offered to subscribe to 25 percent of Nadecor’s outstanding capital stock by plunking in a fresh P1.8 billion. But instead of coming up with the funds, Queensberry told Nadecor that its representatives, Manuel Paolo Villar and Ma. Nalen Rosero-Galang, would no longer participate in future Nadecor meetings, citing the intracorporate dispute as its reason.
Thus, bye-bye, Queensberry.
But control of the company is still up for grabs. What’s at stake? A rich copper and gold mine in Compostela Valley that could be worth as much as $2.5 billion to a foreign investor. Expect the fireworks to continue. Daxim L. Lucas
D-Day for water
Barring any last minute hitches, Metropolitan Waterworks and Sewerage System (MWSS) will release today (Wednesday, Sept. 4) its decision on the petition of PLDT group-controlled Maynilad Water Services Inc. and Ayala-controlled Manila Water Co.—and not a few hands are being wringed in anxiety at both companies.
This is especially so, given the recent bad press both firms suffered after information surfaced (deliberately?) that they had been passing on all these years to the consuming public the income tax burden that should have been theirs (notwithstanding that regulators had always approved it in the past).
Of course, this rate review—which happens every five years—is provided in both firms’ concession agreements with the government to allow them to adjust their charges and keep in step with the rising costs of doing business.
But given the recent adverse publicity (which some in the private sector suspect was initiated by the government side), will both firms get the rate increases that they have asked for? Big question mark.
On the other hand, another big question is… can the government afford not to approve the petition for a rate increase? Regulators are no doubt aware that the deals with Manila Water and Maynilad are prime examples of cooperation between the government and the private sector (what is called “PPP” nowadays) and the failure to give private firms their due might undermine further the already struggling PPP scheme.
The thing is, if the government disallows a rate increase, this would send a very bad signal to the rest of the private sector, especially those conglomerates and foreign investors looking at putting up much needed toll roads, airports or power plants, among others.
After all, who’s going to plunk in billions in infrastructure if the government does not make it a profitable enterprise for the investor? Remember the 1990s when Metro Manila residents had to stay up past midnight to accumulate water in pails? Food for thought for government regulators. Daxim L. Lucas
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