A row has erupted between the Philippine Stock Exchange (PSE) and Holcim Philippines over the cement giant’s ongoing P1.7-billion tender offer as small stockholders face an unexpected problem.
Holcim Philippines aims to go private after the tender offer. But it said on Friday that minority stockholders willing to sell their shares will have to do so outside the facilities of the exchange after the bourse rejected the company’s request to lift the trading suspension on its stocks.
The PSE said it could not lift the suspension because of a 2012 tax regulation from the Bureau of Internal Revenue (BIR).
Executing trades outside the PSE’s platform will expose the company’s investors to capital gains and documentary stamp taxes instead of the usual stock transaction tax. Moreover, they will be subjected to the burdensome process of securing all documentary requirements and tax clearances before selling their shares.
Heated response
Holcim Philippines issued an advisory to investors on the bourse’s rejection, triggering a heated response from the PSE.
“[Holcim Philippines] now wishes to assign the responsibility of addressing this tax predicament to the exchange by informing shareholders that the matter can only be resolved if the suspension on its shares will be lifted by PSE,” the bourse said in a rare media statement over the weekend.
“The PSE takes strong exception to this ‘finger-pointing’ attempt of the company. The lifting of the suspension is not a discretion or prerogative that can be exercised by PSE. It is a regulation covered and imposed under BIR RR 16-2012. PSE has always upheld and will continue to uphold, not violate, existing laws and regulations,” it added.
Regulations state that trades involving a listed company that is noncompliant with the minimum public ownership rule are subject to capital gains and documentary stamp taxes.
Shares of Holcim Philippines were suspended last June 29. It announced that same day the Holcim Group bought out Japanese minority stockholder Sumitomo Osaka Cement Co., causing its public ownership level to fall to 5.05 percent from over 14 percent.
Veteran stockbroker Joseph Roxas, president of Eagle Equities Inc., suggested the PSE might be able to convince the BIR and secure an exemption for a “win-win” situation for the BIR and small investors.
The Holcim Group is buying out minority shareholders owning 325.6 million Holcim Philippines shares at P5.33 each. It urged stockholders participating in the tender offer do so at the earliest possible time to meet the deadline on Aug. 30.
“Shareholders who wish to participate in the tender offer are strongly urged against tendering their shares at the last minute to allow sufficient time to correct any deficiency in their application (or any document submitted in support thereof),” it said. INQ