The chief executive officer of Alliance Select Foods International Inc., a listed firm which is currently embroiled in a deep shareholder squabble, has refuted charges of mismanagement and self-dealing pressed by a group of irate Singaporean shareholders.
In a statement, Alliance’s Jonathan Dee said the origin of Alliance as a joint venture company to be funded to the extent of 70 percent by a Thai investor and 30 percent by the Dee family with the objective of operating the tuna canning business of an old entity First Dominion group of companies, was “never a secret.”
Arguing against allegations of “less than arms-length dealing” made by the Singaporean group represented by Hedy Yap-Chua, Dee said the Regional Trial Court of Pasig City itself had approved, and together with the court-appointed rehabilitation receiver, had supervised the implementation of the 2003 amended rehabilitation plan. This plan expressly provided for the incorporation of Alliance as a joint venture company.
The rehabilitation plan separately provided for the source of payments by the First Dominion group to its creditors, Dee said. Coming into the business, Dee said the Thai investor was fully aware that the investment was part of the rehabilitation plan. He said the transaction was not a “bailout” but the “devolution” of First Dominion’s business into the joint venture company for its use of its “production-ready and market-accredited food processing plant in General Santos City.”
Before it came into financial difficulties because of the Asian financial crisis and downturn of the Philippine economy in mid-1997, Dee noted that First Dominion was the largest tuna processor in the Philippines and the second largest in Asia in terms of installed production capacity. But in 1998, the group was hit by the Asian financial crisis as the decline of the peso vis-à-vis the US dollar resulted in foreign exchange losses.
“The Thai investor saw the business opportunity of owning a major tuna operation without having to start from scratch, and seized it by infusing capital in the joint venture company provided for in the amended rehabilitation plan,” Dee said.
At no point in Alliance’s existence did it come to acquire or “inherit” any debt of the First Dominion group, much less “a total unsecured debt of P2.39 billion,” Dee said. Payments to creditors in the rehabilitation proceedings were sourced and made by the First Dominion group independently from Alliance.
Without the existing operations, organization and network of First Dominion, Dee said Alliance would not have come into being. Doris C. Dumlao