Alphaland accuses Ashmore of simulating sale of shares

The break-up between British fund Ashmore and local partner Roberto V. Ongpin has turned uglier as the foreign fund allegedly misrepresented an equity deal in 2012 to keep property joint venture Alphaland Corp. listed on the Philippine Stock Exchange.

In a disclosure to the PSE Monday, Alphaland said it has recently come to the attention of its management that Ashmore’s sale of 49.61 million shares or 2.5 percent of Alphaland in end-2012 to Credit Suisse was only “simulated” and that the British fund was still the beneficial owner.

PSE suspended trading on shares of Alphaland after the disclosure.

Alphaland attached to its disclosure an e-mail dated June 6, 2013, from Ashmore executive Thomas Donnelly discussing the equity structure with Aurora Calderon, senior vice president at San Miguel Corp. The letter suggested that Ashmore was in talks to sell a 69.4-percent stake in Alphaland to SMC for $400 million at that time.

A source from SMC said yesterday that Ashmore’s stake in Alphaland was indeed offered to SMC but disagreements with Ongpin’s group erupted after the equity structure was clarified. Not wanting to be in the middle of the feuding parties, the source said SMC no longer pursued discussions on the Alphaland stake.

The letter showed that Ashmore funds owned shares in Alphaland through two entities: Singapore-incorporated Ashmore Investment Management Ltd. (36.2 percent) and Philippine-incorporated Masrickstar (35.8 percent).

In addition, Credit Suisse owns 2.5 percent of the property developer, the same stake that was supposed to have been unloaded in 2012 but as disclosed now, was still controlled by Ashmore.

Net of Ongpin’s 5-percent stake in local holding firm Masrickstar, the letter suggested that Ashmore controlled 69.4 percent of Alphaland.

Alphaland disclosed on Jan. 2, 2013, that Ashmore’s Singapore unit had sold 49.61 million Alphaland shares to Credit Suisse (Singapore) Ltd., allowing Alphaland to comply with the 10 percent minimum public float required by the PSE for continued listing. As such, trading suspension on Alphaland was lifted in March 2013.

But Alphaland said it only found out recently that Ashmore had “misrepresented the fact of sale,” leading to the “completely incorrect disclosure.”

“Ostensibly and for its own selfish purposes, Ashmore simulated the sale (and misrepresented the same to Alpha) in order to ensure that Alpha remains listed with the Exchange,” the disclosure said.

“Alpha is aware that as a result, it may no longer be deemed compliant with the 10 percent minimum public ownership requirement,” the property firm said.

When it was still in talks with SMC, Ashmore said its preference would be to sell its top Cayman holding entity—Ashmore Cayman SPC Ltd., the entity that controls the entire Ashmore holding structure in Alphaland.

Alternatively, Donnelly suggested in the letter that Ashmore would also be willing to sell its Singapore entity, the corporate layer below the Cayman entity, which held direct shares in Alphaland as well as indirect shares through Masrickstar.

“We are also happy to consider directly selling the listed shares but this option will be more time consuming and would not benefit from the offshore aspects of the other potential sale structures,” Donnelly said.