MANILA, Philippines—The squabble between the Filipino and Singaporean shareholders of Alliance Select Foods International Inc. has would up in court, with the controlling local group accused of mismanagement, self-dealing and siphoning off company funds.
Alliance Select and minority shareholders Harvest All Investment Ltd., Victory Fund Limited, Bondeast Private Ltd. and director Hedy Yap-Chua filed the lawsuit with the Pasig regional trial court last May 27.
In a statement, the group of foreign shareholders led by Yap-Chua accused Alliance directors George SyCip, Ibarra Malonzo, Alvin Dee, Jonathan Dee and three other company officials of “colluding to enter into transactions that were advantageous to them and/or their interests but grossly disadvantageous to the company.”
Because of the alleged self-dealing and related transactions undertaken by management for years, “Alliance Select is barely able to pay interest on its maturing loans to the government and private banks without resorting to advances from current stockholders or infusions of equity from new investors at the expense of diluting the company’s shareholders,” the complainants said in a statement.
The Singaporean bloc claimed that Alliance’s financial situation became “so dire” that by the end of 2013, its standalone cash was only equivalent to one month’s operating expenses.
Among the transactions cited in the derivative suit was a series of multimillion-dollar payments of company funds authorized by Alliance management to BSJ Fishing and Trading Inc., a fishing company 58.4-percent owned by Lope Jimenez. Jimenez also owned a 4.2-percent stake in Alliance Select as the canning company entered into a series of transactions with BSJ from 2008 to 2011, the statement said.
The court petition accused Jonathan Dee, the company chief executive officer, and the rest of the respondents of paying P685.3 million in company funds to BSJ “without benefiting Alliance and, apparently, despite the absence of prior approval from the Alliance board.”
But when BSJ went bankrupt, Dee altered his justification for the disbursements, claiming it to be loans to BSJ.
“These loans were hidden and wiped off the company’s books at the same time by a dubious dacion agreement with BSJ for vessels of suspect value,” the complainants said.
The derivative suit detailed the alleged efforts of Alliance to “wash away” the “egregious” losses incurred by the company.
“Alliance has been run as a milking cow of the Dees and their interests, in fraud of the company and its shareholders. This clearly violates the fiduciary duties of the respondents to the company and its shareholders,” the Singaporeans said.