The board of Manila Polo Club has rekindled a prepandemic plan to raise new money by allowing “associate” members—spouses, children or estate administrators holding conditional membership attached to the original proprietary shares— to buy standalone privileges at the prestigious club for P2 million.
The amount is proposed to be paid as one-time membership “delinking” fee.
This means that even if the original parent share is sold in the future, delinked associate members get to keep their benefits. Associates have nearly the same benefits and access to the club as the proprietary members, except for the right to vote and be voted for.
The option to delink within a specific period will be presented for general membership approval during the next annual general meeting on Aug. 27, based on an advisory sent to members.
Likewise up for approval is another controversial item to amend the bylaws to allow widows and widowers of associate members to apply as “courtesy” members.
Ahead of the meeting, however, the initiatives have divided the community and put the proxy solicitations of certain proponents under scrutiny. The board, for its part, circulated a briefer and called for two town hall meetings, the first one today and another on Wednesday, to discuss the issue.
Depending on which side of the fence one is sitting, the delinking is either a genius fundraising tactic to upgrade amenities that will benefit members, or a rash scheme that will benefit just a few, particularly those raring to monetize proprietary shares because they hold multiple associate memberships within the family anyway. Dissenters fear it could cheapen club shares, currently valued at some P53 million each, as more of those delinked shares flood the market.
Polo Club has 2,177 proprietary shares to date, of which 149 have associate memberships, some even with a multiple of them.
The club has a total of 297 associate members. If even just half of them take the delinking option, it can easily raise about P300 million for the club, which has big expansion and upgrading plans in the pipeline.
“If the associate member avails of the offer to delink, such associate member shall no longer be subject to the condition that the associate membership ceases upon the sale, donation, or any transfer of the proprietary membership of the parent of the associate member to any third party outside the immediate family of such proprietary member,” the club briefer said.
After the delinking, the associate member is still prohibited from assigning such membership along with any attached rights and privileges.
There won’t be other additional rights or privileges granted to the associate member, the club noted. Neither will it diminish the rights and privileges enjoyed by the proprietary members.
How it all began
Associate membership was created by Polo Club about two decades ago when it was in dire need of new money. The new class of membership was offered to proprietary members who then wanted to give shares to their heirs.
The proposal to delink the associate shares was passed by the past board of Polo Club in 2019. The club by-laws allow the board to establish the terms and conditions for associate membership.
It was subsequently ratified during the membership meeting that year. A former official recalled that this didn’t draw much flak then because the club badly needed money.
However, the succeeding boards did not implement the delinking, especially as some of the trustees felt strongly that more disclosure on the implications to the membership should be made. Some claimed that many had unwittingly ratified the proposal in 2019 when they gave their proxies to proponents pushing for the delinking.
“The reason why club share price is so high is because supply is limited. What will happen is it (delinking) will flood the market but will benefit less than 10 percent of members,” the source said.
At the same time, the argument that the club badly needs the money no longer holds water today as it has rebuilt reserves back to a comfortable level, amounting to several hundreds of millions of pesos, the source said.
Some of those who had paid a hefty sum to become members now don’t relish the idea of having people enjoying the same privileges that are not linked to any proprietary share for just P2 million, it was further explained. — Doris Dumlao-Abadilla