The chosen feud
The court just dismissed the petition of two Singaporean nationals to issue a TRO against the investments of a local company in the publicly listed tuna-canning company called Alliance Select Foods, codenamed “FOOD” in the stock exchange.
For some time now, as we all know, the Singaporeans—Hedy Chua and Albert Hong Hin Kay—were locked in a boardroom feud against the group of Alliance president and CEO Jonathan Dee, who founded the company about 10 years ago. At the same time, the Singaporean camp attacked Alliance chair George Sycip, the son of SGV founder Washington Sycip. The young Sycip sat in the Alliance board as an independent director.
The Singaporeans claimed to own 34 percent of Alliance and they apparently could not believe that the company could post losses of almost $3 million in 2013, or about P130 million. And so the two earlier filed a criminal case against the Alliance management, asking the court to open its books to them, as stockholders, aiming to check the claims of Alliance management on the reasons for what the Singaporeans called “alarming” losses.
For one, according to reports, which seemed to come from the Singaporean camp, they already accused the Dee group of “self-dealing” in the company, such as the alleged lopsided lease of properties of the Dee family to the listed firm. While the criminal court case was still hanging, Alliance nevertheless announced the private placement of some P564 million, or almost 29 percent, of the listed firm, coming from a little known company called Strong Oak.
Anyway, claiming that the transaction would dilute their holdings in Alliance by at least 10 percentage points, leaving them with 24.5-percent control, from the original 34.5 percent, the Singaporeans sought the TRO against the deal. But the Regional Trial Court of Pasig recently dismissed the petition, noting that it did not appear to be of “extreme urgency,” perhaps inspiring the Dee group to claim that the court ruling as a legal victory for them.
So far the feuding groups of stockholders threw accusations at each other. While the Singaporean camp accused the Dee group of “self-dealing,” the Dee group revealed that the Singaporeans insisted on a compensation of P600,000 a month for the auditor that worked exclusively for the Singaporeans. The Singaporeans also questioned the “high” salaries of Alliance management, but the Dee group leaked out information that the Singaporeans insisted that Alliance give a salary to an offspring that was equivalent to the prevailing rate in Singapore.
To top it all, word went around that the Singaporeans wanted Alliance to set up its main office in Singapore, which then would require the company to pay a management fee of almost P700,000 a month to the Singaporeans.
Thus, speculation went around in the local stock market that, perhaps, some groups wanted to take control of Alliance for eventual listing at the Singapore Stock Exchange.
Anyway, based on recent reports in media, the two Singaporean also questioned the capability of Strong Oak to invest almost P600 million in Alliance, noting that the capitalization of Strong Oak amounted to only P62,500.
Now Albert Hong Hin Kay represented a Hong Kong firm called Harvest All in Alliance, and according to the Dee group, that company had a paid-up capital of only one Hong Kong dollar.
The corporate vehicle of Hedy Yap-Chua in Alliance shares was a firm called Victory Fund, which according to the Dee group had a paid-up capital of only three Hong Kong dollars.
Between us girls, however, I heard that Strong Oak was actually the new investment arm of a group that had some loaded families, including the main stockholders of a local commercial bank.
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Hmmm—it seemed for a while there that some groups launched an orchestrated campaign against United Coconut Planters Bank, or UCPB, and one board member, apparently in connection with the multibillion-peso Coconut Levy Fund.
Well, for almost 30 years now, the bank has been under the control of the government outfit called PCGG, the Presidential Commission on Good Government, which nevertheless was suspiciously quiet throughout the barrage of accusations hurled against UCPB. Actually, the PCGG should nominate the board members of the bank, although it was widely known that the appointments would invariably come from the Palace.
Question: Was the orchestrated attack misdirected?
Anyway, the government already obtained complete control of the fund since the Supreme Court already decided that it would have to be turned over to the national treasury. The term levy, according to the High Court, was just another word for “tax,” or a compulsory payment imposed by the government, thus laying down the reason for the turnover to the national government.
The Supreme Court nevertheless also ruled that, in taking hold of the fund, the government should use it to benefit the Filipino coconut farmers and improve the coconut sector in the long term. There—the thing was that, well, the court already specified that the funds be used for the benefit of the country’s coconut farmers. I thought it would be more productive if the orchestrated campaign instead agitate the government to draw up and implement—immediately—the programs for the coconut farming sector, particularly for the farmers.
Well, in the past, the fund has always attracted struggles over its control and it would not be surprising if such interest would still exist up to today, even including some personalities in the PCGG.
Look, the commission has to speak a word on the issue, which surely would not just go away on its own, because it would have to be the PCGG that must explain to the public the programs and plans for the coconut sector.
Well, did the PCGG even start anything on how best to administer the fund? Or would this issue be like the one regarding a huge property at the Ortigas Center that the current PCGG leadership did not want to touch?