Court’s help sought over Chemphil sale of LMG stake
MANILA, Philippines—Stockbroker Ramon M. Garcia, a shareholder and director at Chemical Industries of the Philippines Inc. (Chemphil), has petitioned the Makati Regional Trial Court to stop the company’s sale of its entire 66-percent stake in subsidiary LMG Chemicals Corp. to a new investor.
Antonio Garcia—chair of both Chemphil and LMG—and other company officials were named respondents in the lawsuit filed by Chemphil, represented by RG Holdings Corp., and Ramon Garcia, Antonio’s brother, according to separate disclosures Chemphil and LMG submitted to the Philippine Stock Exchange on Wednesday.
Apart from suing his own brother, Ramon also sought the issuance of a temporary restraining order and/or writ of preliminary injunction to block the sale of Chemphil’s 127.58 million shares in LMG Chemicals Corp.
The other respondents were Ana Maria Ordoveza, Jesus Alcordo, Paulino Alvaro and Manuel Gamboa, all members of the Chemphil board, along with Luis Vera Cruz Jr., Alexandra Garcia, Salvador Pena, Norman Ng, Asian Alliance Investment Corp. and LMG Chemicals Corp.
The petition was docketed at the Makati RTC as civil Case No. 14-168.
Ramon earlier told the Inquirer that he opposed the transaction because of the questionable shareholders’ approval. He said that only 52 percent of shareholders voted for the deal to push through while the legal requirement under the corporate code covering the disposition of substantial assets was that a two-third vote must be obtained.
Garcia had said he would not agree to this transaction for “lack of transparency.” He added that he would agree to the sale of LMG stake only “if the price is right.” He said the transaction was being priced at a big discount due to unpaid advances from stockholders. The solution, he said, should be to pay off the advances and later sell the company with clean books.
For many years, Chemphil’s shares have been the subject of a garnishment case filed by Ramon, who cited unpaid cash advances by the firm.
The hearing on Ramon’s petition for a restraining order will be held on Feb. 21.
Antonio, on his part, feels that the petition should be dismissed by the court for being a “nuisance” and “frivolous” case.
